# What economic problem might exist for the government to make this fiscal policy change?

What is the eq Show more a. Complete the table above with the assumption that I and G are fixed. b. What is the equilibrium level of GDP in the economy? c. When the economy is at equilibrium what is the level of saving? d. Determine if I = S + (T G) when the economy is at equilibrium. Is the government borrowing or running a deficit? Explain why or why not. e. What is the value of the MPC? Set-up the equation for C. f. Sketch the graph of the C C + I C + I + G lines with the 45 0 line. Indicate the equilibrium point(s). g. What is the value of the expenditure multiplier? h. What is the value of the tax multiplier? i. If the government increases spending by 100 what would be the new equilibrium value of GDP? What economic problem might exist for the government to make this fiscal policy change? j. If the government wanted to achieve the same change in GDP as in i by cutting taxes instead how large would the tax cut have to be? Show less

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