Complete the following exercise. 1. Assume the MPC is 0.80 and the government increases spending on cancer research

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Complete the following exercise.
1. Assume
the MPC is 0.80 and the government increases
spending on cancer research by $15 billion. What is the value of
the initial impact on real GDP? What is the value of the total
impact on real GDP?
1. Describe a
policy measure the government can use to close a recessionary
gap.
2. Illustrate
your response to question 1 in a graph.
3. Describe a
policy measure the government can use to close an inflationary
gap.
4. Illustrate
your response to question 3 in a graph.
Working with Multipliers
Complete the following exercise.
1. Assume
the MPC is 0.80 and the government increases
spending on cancer research by $15 billion. What is the value of
the initial impact on real GDP? What is the value of the total
impact on real GDP?