Complete the following: Draw the diagram for Country A whe…
Complete the following: Draw the diagram for Country A when it is experiencing macroeconomic equilibrium. Be sure to label this correctly. Household indebtedness increases in Country A. What will shift, and in which direction? Draw this on your original diagram. What kind of gap is created? According to classical economists, what will happen in this economy? Explain. The government decides to use fiscal policy. What tools could be used? If the gap is $400 million, and the MPC is 0.5: By how much and in what direction would the government change spending? By how much and in what direction would the government change taxes? Explain what is meant by the MPC of 0.5. Submissions:-Text Entry and/or Insert your File using Image Upload in your response with graphs: Draw and insert your graph (using the Image Upload) and then type your answer the questions below your graph