Consider an economy in which the current level of GDP is 500B, the goverment multiplier is 2, the marginal tax rate is 10%, the current budget deficit is 5B.
If the goverment wants to increase GDP increase to 525B, it can increase government spending & by ___Billion. The budget deficit will increase to _
_Billion .
Round your answers to the nearest 2 decimal points. Do not include a dollar sign or billion indicator B.
Hint and note: This problem is looking for a change in government spending (A) and the new budget deficit (B). To help you out, the budget deficit is G - T.