A. If your MPC = 0.6 and government spending (G) increases by $800. What will happen to the equilibrium income? The Effect of Taxation: Tax Multiplier = -MPC X Spending Multiplier Problems: B. If the...

A. If your MPC = 0.6 and government spending (G) increases by $800.

What will happen to the equilibrium income?

The Effect of Taxation:

Tax Multiplier = -MPC X Spending Multiplier

Problems:

B. If the MPC = 0.8 and taxes go up by $1000, what will happen to the equilibrium income?

Please fully complete both problems.