Using Real GDP on the Horizontal Axis Instead of Real

Multiple Choice

Using real GDP on the horizontal axis instead of real disposable income implies that a marginal propensity to consume 0.75 generates for every additional $100 of real GDP

A) $75 of additional real disposable income.
B) $25 of additional saving.
C) $56.25 of additional consumption spending.
D) $25 of additional saving and taxes.