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Explain recession caused by the covid-19

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The U.S. economy and the world economy are in a recession caused by the COVID-19. Assume that the government increased its budget spending by 30 billion dollars and at the same time increased tax collection by 20 billion dollars. MPC is 0.8. by how much will GDP increase? What should the Fed do when the government increases its spending to help the economy recover from the recession?

Use the AD and AS curves in your explanation.

Reference no: EM132661297

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