Suppose we have the following scenario:   Multiplier: 1.7 Ta…

Suppose we have the following scenario:   Multiplier: 1.7 Tax Rate: 20% Increase in spending: $300 Billion Total Deficit in the previous year: $1 Trillion   Based on the information provided what is the deficit that arises from the increase in spending from the government?

Suppose that the Mexican peso has depreciated dramatically r…

Suppose that the Mexican peso has depreciated dramatically relative to the dollar and the central bank in Mexico is concerned about possible inflation brought about by the surge in import prices. Question: How can the central bank in Mexico counter the depreciation of the Mexican peso?