The government decreases taxes by $50 million. Given MPC = 0.8, how much would AD increase due to multiplier effects? Answer: AD will increase by $ million. D Question 19 The government wants to increase AD by $800 million. Given MPC - 0.9. how much should the government increase spending? Answer: The government should increase spending by $ million D Question 20 On the balance sheet of Bank E. it shows deposits of $30,000 as a liability. Suppose Bank E has $10,000 total reserves. Given that rr - 30%, what is the maximum amount of money that Bank E can lend out? Answer: Bank E can lend out at most $