Increase aggregate demand

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Reference no: EM132184420

Assume the economy is in recession and real GDP is below full employment. The marginal propensity to consume (MPC) is 0.50, and the government follows Keynesian economics by using expansionary fiscal policy to increase aggregate demand (total spending). If an in crease of $1,000 billion aggregate demand can restore full employment, the government should:

Reference no: EM132184420

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