If the marginal propensity to consume is 0.75 and private investment increases by N10 billion while government expenditure decreases by N15 billion, GDP will decrease by?

If the marginal propensity to consume is 0.75 and private investment increases by N10 billion while government expenditure decreases by N15 billion, GDP will decrease by?

A N12 billion
B N15 billion
C N20 billion
D N25 billion

jamb 1997 economics

The correct answer is D. N25 billion

No explanation given

Previous question Next question