Figure 23-3 -Refer to Figure 23-3. Suppose That Government Spending Increases, Shifting

Multiple Choice

Figure 23-3
-Refer to Figure 23-3. Suppose that government spending increases, shifting up the aggregate expenditure line. GDP increases from GDP₁ to GDP₂, and this amount is $400 billion. If the MPC is 0.75, then what is the distance between N and L or by how much did government spending change?

A) $10 billion
B) $100 billion
C) $200 billion
D) $300 billion