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VESTION 26 Suppose that the economy is in recession. Shifting the aggregate demand curve rightward by $10 billion would end the recession. a. If MPC

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VESTION 26 Suppose that the economy is in recession. Shifting the aggregate demand curve rightward by $10 billion would end the recession. a. If MPC = 0.75 and there is no crowding out, by how much should the government increase its spending (G) to end the recession? b. If there is crowding out, will the government need to increase G by larger or smaller than this amount (i.e., the amount you compute in part a)? In one or two sentences, explain your reason. Please show all your steps and explain clearly to get the full marks. TTT Arial 3 (12pt) T UNM Words:0 Path: p

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