Answer:
hey! I don't know the answer, but I'm pretty positive it's on socratic:)
Answer:
<em>Transfer payments</em>
Explanation:
John Maynard Keynes in his theory of total spending argued that consumers need to spend to maintain an economy. He stated that an increase in spending will replicate the effect in an economy and the government needs to spend more to reduce unemployment.
John Maynard Keynes categories of spending include;
- <em> Consumption spending,</em>
- <em>investment </em>
- <em>government Purchases or expenditure </em>
- <em>and net export </em>
Transfer payments are not categorized in John Maynard's categories of spending.
Answer:
The government should increase spending by $40 million.
Explanation:
The MPC is given as 0.5.
The recessionary gap is $80 billion, this means to reach full employment level of output, the government needs to increase income by $80 billion.
Increase in GDP = 
Increase in GDP = ΔG\ \times\ 
$80 billion = Δ
$80 billion = Δ
ΔG = 
ΔG = $40 billion
