Exhibit 16A-5 Macro AD\AS Models As shown in Exhibit 16A-5, assume the marginal propensity to consume MPC equals 0.75. Using discretionary fiscal policy, federal government spending should be ____ in order to restore the economy from E₁to full employment. A)increased by $.25 trillion B)decreased by $.25 trillion C)decreased by $2 trillion D)increased by $2 trillion E)increased by $1 trillion

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The Answer of Exhibit 16A-5 Macro AD\AS Models As shown in Exhibit 16A-5, assume the marginal propensity to consume MPC equals 0.75. Using discretionary fiscal policy, federal government spending should be ____ in order to restore the economy from E₁to full employment. A)increased by $.25 trillion B)decreased by $.25 trillion C)decreased by $2 trillion D)increased by $2 trillion E)increased by $1 trillion

Exhibit 16A-5 Macro AD\AS Models as Shown in Exhibit