(Solved): The graph below depicts an economy where a decline in aggregate demand has caused a recession. Assu ...

The graph below depicts an economy where a decline in aggregate demand has caused a recession. Assume the government decides to conduct fiscal policy by increasing government purchases to reduce the burden of this recession. Fiscal Policy Instructions: Enter your answers as a whole number. a. How much does aggregate demand need to increase to restore the economy to its long-run equilibrium? $$\$$$ billion b. If the MPC is 0.75 , how much does government purchases need to increase to shitt aggregate demand by the amount you found in part a? billion Suppose instead that the MPC is 0.6 . c. How much does aggregate demand and government purchases need to increase to restore the economy to its long-run equilibrium? Aggregate demand needs to increase by $$\$$$ biliion and government purchases need to increase by $$\$$$ billion.