The Prime Minister of Richlandia hires you as an economic consultant. He is concerned that the output level in Richlandia is too low and that this will cause unemployment to rise. He feels that it is necessary to increase output by $20 billion. He tells you that the MPC = 0.75. Which of the following would be the best advice to give to the Richlandia Prime Minister?
Question 11 options:
increase government purchases by $15 billion
reduce taxes by $10 billion
reduce taxes by $4 billion
increase government purchases by $5 billion