Two identical countries, Country A and Country B, are in a recession. The governments in both countries want to
use expansionary fiscal policy to stimulate aggregate demand, but they are considering different fiscal policy tools.
Country A decides to increase government spending by $2 billior, while Country B decides to cut taxes by $2 billion.
The MPC (marginal propensity to consume) is 0.9 in each country. In which country will the new equilibrium level of income (Y) be greater? Show your answer using a numerical
calculation and a written explanation.