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Business, 18.04.2020 00:57 klivingston1012

Suppose the economy is operating at its full-employment-noninflationary GDP and the MPC is 0.75. The Federal government now finds that it must increase spending on military goods by $%21 billion in response to deterioration in the international political situation. To sustain full- employment-noninflationary GDP government must:
a) reduce transfer payments by $21 billion.
b) increase taxes by $21 billion.
c) increase taxes by $28 billion.
d) reduce taxes by $28 billion.

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