Suppose real GDP in the economy has decreased by $25 billion. This economy has neither an income tax system nor imports goods and services. Therefore, by how much must autonomous expenditure have had to change initially in order to cause such a result? Assume a marginal propensity to consume of 0.8.
- It must have decreased by $24 billion
- It must have increased by $24 billion
- It must have decreased by $5 billion
- It must have increased by $5 billion
- None of the above