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- During a recession, does G or I fall more? Why? G = goverment spending I = investment spendingSuppose real GDP is currently $12.5 trillion and potential real GDP is $13 trillion. If the president and Congress increased government purchases by $500 billion, what would be the result on the economy?How do budget surpluses and budget deficits affect the consumption and investment components of GDP
- Government Spending and How it Affects Aggregate DemandI'm doing economics homework and the question is asking If taxes were cut by $1 trillion and the MPC was 0.93, by how much would total spending increase in the first year with two spending cycles a year. Do I need to know MPS?If Government expenditures increase by $800B and MPS is equal to 0.05, what will be the increase in real GDP?
