Current equilibrium output equals $2,500,000, potential output equals $2,600,000, and the marginal propensity to consume equals 0.75. Under these conditions, a Keynesian economist is most likely to recommed
A) decreasing taxes by $25,000
B) decreasing taxes by $100,000
C) increasing government spending by $25,000
D) increasing government spending by $33,333
E) increasing government spending by $100,00
Ans: C) increasing government spending by $25,000
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