Calculate the amount that baselo government must increase

Reference no: EM133710435

Assume that in Baselo, the economy is stalled. In Baselo, the marginal propensity to consume is 0.70. The Baselo government wants to enact expansionary fiscal policy.

Question 1. Explain actions that Baselo's government can take to enact the desired expansionary fiscal policy.

Question 2. Calculate the amount that Baselo government must increase or decrease its purchase to increase real GDP by $5 trillion. Show your work.

Reference no: EM133710435

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