In the Short-Run Keynesian Model Where the Marginal Propensity to Consume

Multiple Choice

In the short-run Keynesian model where the marginal propensity to consume is 0.75, to offset a recessionary gap resulting from a $1 billion decrease in autonomous consumption, transfers must be:

A) increased by $1 billion.
B) decreased by $1 billion.
C) increased by $1.33 billion.
D) decreased by $1.33 billion.