If the MPC = 0.8 and both government purchases and autonomous net taxes fall by $100 billion, by how much does the equilibrium level of real GDP demanded change (assuming neither income taxes nor net exports exist)?
A)-$100 billion
B)+$100 billion
C)-$500 billion
D)+$500 billion
E)+$200 billion

Question

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The Answer of If the MPC = 0.8 and both government purchases and autonomous net taxes fall by $100 billion, by how much does the equilibrium level of real GDP demanded change (assuming neither income taxes nor net exports exist)?
A)-$100 billion
B)+$100 billion
C)-$500 billion
D)+$500 billion
E)+$200 billion