Suppose that in an economy with an MPC of .8 the government wanted to shift the aggregate demand curve leftward by $40 billion at each price level to remedy demand-pull inflation.It could:
A)increase taxes by $10 billion.
B)reduce government spending by $40 billion.
C)reduce government spending by $5 billion.
D)increase taxes by $20 billion.

Question

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The Answer of Suppose that in an economy with an MPC of .8 the government wanted to shift the aggregate demand curve leftward by $40 billion at each price level to remedy demand-pull inflation.It could:
A)increase taxes by $10 billion.
B)reduce government spending by $40 billion.
C)reduce government spending by $5 billion.
D)increase taxes by $20 billion.

Suppose That in an Economy with an MPC of