(a) You are the economic adviser of Keyneslanding, the president calls you into her office and says to you "Half of our congress members want to increase tax by $200 and half of our congress members want to increase government spending by $200. I want to make these congress members happy. IfI implement a tax increase by $200 while at the same time increase government spending by $200. Does it really affect the economy?" Please explain in detail to the president how would this policy affect the economy.

(a) You are the economic adviser of Keyneslanding, the president calls you into her office and says to you "Half of our congress members want to increase tax by $200 and half of our congress members want to increase government spending by $200. I want to make these congress members happy. IfI implement a tax increase by $200 while at the same time increase government spending by $200. Does it really affect the economy?" Please explain in detail to the president how would this policy affect the economy.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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