Consider a simple macro model with a constant price level and demand$-$determined output.

If the simple multiplier Ks $=1\mathrm{.}25$ and there is a $$120$ million increase in autonomous investment spending, then the equilibrium level of income will

Question $27$ options:

increase by $$125$ million

increase by $$120$ million.

decrease by $$125$ million.

decrease by $$120$ million.

increase by $$150$ million.