If the marginal propensity to consume (MPC) is 0.75 and new government spending increases by $100 billion, then Hint: first determine the expenditure (or income) multiplier based on the MPC. A) equilibrium real Gross Domestic Product (GDP) will increase by $200 billion. (B) equilibrium real Gross Domestic Product (GDP) will increase by $400 billion. ( C) equilibrium real Gross Domestic Product (GDP) will increase by $40 billion. D) the effect on equilibrium real Gross Domestic Product (GDP) cannot be determined from the given information