If taxes were cut by $1 trillion and the MPC was 0.75, by how much would total spendingInstructions: Round your responses to two decimal places.increase in the first year with two spending cycles per year?$ trillionincrease over three years, with two spending cycles per year?$ trillionincrease over an infinite time period per year?$ trillion

The question is asking for the increase in total spending given a tax cut and a certain Marginal Propensity to Consume (MPC). The formula to calculate the total spending increase is:

Total Spending Increase = Tax Cut / (1 - MPC)

1. Increase in the first year with two spending cycles per year:

The total spending increase for the first year would be calculated as follows:

Total Spending Increase = $1 trillion / (1 - 0.75) =$4 trillion

However, since there are two spending cycles per year, the increase in spending would be divided by 2:

Total Spending Increase for the first year = $4 trillion / 2 =$2 trillion

2. Increase over three years, with two spending cycles per year:

For three years, the total spending increase would be:

Total Spending Increase for three years = $2 trillion * 3 =$6 trillion

3. Increase over an infinite time period per year:

For an infinite time period, the total spending increase would be the same as the initial calculation of $4 trillion per year. This is because the spending cycles would continue indefinitely, leading to a constant annual increase.