The government decides to increase spending on education by $400, and at the same time to keep the budget balanced, increase taxes by $400. If MPC in the economy is 0.9, how are the government's efforts going to affect output in the economy? The government decides to increase spending on education by $400, and at the same time to keep the budget balanced, increase taxes by $400. If MPC in the economy is 0.9, how are the government's efforts going to affect output in the economy? Output in the economy will stay the same. Output in the economy will decrease by $400. Output in the economy will increase by $400. Output in the economy will increase by $4,000