Suppose the economy begins at full employment and then consumer confidence rises. As a result, the economy is currently experiencing an AD shortfall of $120 billion (AD is 120 below fe) and the MPC=8. What is the appropriate change in Government spending if fiscal policy is used to move the economy back to full employment? a) $24 billion increase in G b) none of the other answers is the appropriate amount of change in G c) $30 billion decrease in G d) $40 billion increase in G

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