Suppose the GDP is in equilibrium at full employment and the MPC is .80. If government wants to increase its purchase of goods and services by $16 billion without causing either inflation or unemployment, taxes should be: A. Increased by $20 billion B. Reduced by $16 billion C. Increased by $16 billion D. Reduced by $20 billion

A) increased by $20 billion

Explanation:

The Change in government spending should have a corresponding increase of the MPC multiplied by the change in taxes.

Therefore,

$16billion = 0.8 × change in taxes

Change in taxes = $16billion /0.8 = $20 billion(increase)

steering wheels are always situated on the left side of the car.

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hashed or broken lines means you may change lanes when it is safe.

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hashed or broken yellow lines mean you can carefully pass, paying attention to oncoming traffic.

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explanation: