Suppose the government believes consumers should spend $1 billion more to get the economy out of a recession. The government wants to provide income to households by providing them with jobs and paying them directly. If the marginal propensity to consume is 0.8, the government should increase income by
A) $0.2 billion.
B) $0.25 billion.
C) $0.8 billion.
D) $1 billion.

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The Answer of Suppose the government believes consumers should spend $1 billion more to get the economy out of a recession. The government wants to provide income to households by providing them with jobs and paying them directly. If the marginal propensity to consume is 0.8, the government should increase income by
A) $0.2 billion.
B) $0.25 billion.
C) $0.8 billion.
D) $1 billion.

Suppose the Government Believes Consumers Should Spend $1 Billion More