Assume an economy where the deficit response index is zero. If the budget deficit is $85 billion and the multiplier is 4 how much must government spending be cut in order to drive the deficit to zero? What role does the multiplier play in the solution to this problem?

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The Answer of Assume an economy where the deficit response index is zero. If the budget deficit is $85 billion and the multiplier is 4 how much must government spending be cut in order to drive the deficit to zero? What role does the multiplier play in the solution to this problem?

Assume an Economy Where the Deficit Response Index Is Zero