Suppose that real GDP is initially $14 trillion and the government att

Suppose that real GDP is initially $14 trillion and the government attempts to increase real GDP to $15 trillion. The marginal propensity to consume is 0.8, and every $1.00 increase in real government spending crowds out $0.

50 in real planned investment expenditures. Which increase in government spending below could yield the desired level of real GDP?
A) $200 billion B) $125 billion C) $100 billion D) $400 billion

ANSWER

D