Question: please answer The marginal propensity to consume is 0.8, the rate of income tax is 25% of all income and government expenditure is $50 million.

please answer

The marginal propensity to consume is 0.8, the rate of income tax is 25% of all income and government expenditure is $50 million. Which one of the following statements is TRUE? A The simple closed economy multiplier, ignoring taxes, is 2. B The simple closed economy multiplier, including taxes, is 5. C An increase in government expenditure of f10 million will increase the national income by $25 million. D An increase in government expenditure of f10 million will increase the national income by $10 million. [1 1/2]

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