17. Assume that the marginal propensity to consume is equal to 0.8, which of the following policy actions will increase the level of output and income by R1 000 in the goods market?

a. An increase in government spending of R200.

b. A decrease in taxation of R200.

c. A decrease in taxation of R250.

d. A decrease in government spending of R1 000.

1. a and b

2. a and c

3. Only d

4. Only b

5. b and d