If the government wants to reduce unemployment what are some ways it should
change spending and taxes?
Assume the following behavioral equations for a macroeconomy:
C = 100 + .9Y
, I = 50, T = 100 and G = 40
Calculate the equilibrium level of output.
Determine the impact of an increase in government spending of $10 billion when the
is .9. Determine the impact of a decrease in government spending of $5 billion