1. Scenario:. The U. S. economy is in a recession. The recessionary
Scenario: The U.S. economy is in a recession. The recessionary gap equals $500 Billion. The MPC = ) What Fiscal Policy Actions would you take to close this gap? 2) How much would you change G or T to close the gap? 3) Draw an AD/AS Graph showing the recessionary gap and the changes from the action(s) you took. 4) Draw a Loanable Funds Market Graph side-by-side with an Investment Graph and how they are affected by your actions. 5) Based on the change in r% from part 4, draw a FOREX graph for the U.S. Dollar showing what would happen to the demand for the $. 6) Based on the change to the change in part 5, indicate what would happen to Xn and AD/GDPr.