Suppose the MPC = 0

Multiple Choice

Suppose the MPC = 0.60 and government purchases increase by $40 billion.In Keynesian theory,which of the following is true?

A) The TE curve shifts downward by $40 billion and Real GDP decreases by $40 billion.
B) The TE curve shifts upward by $40 billion, and Real GDP increases by $40 billion.
C) The TE curve shifts downward by $40 billion, and Real GDP decreases by $100 billion.
D) The TE curve shifts upward by $40 billion, and Real GDP increases by $100 billion.