Suppose the marginal propensity to consume is 0.8 (MPC=0.8). Assume there is no crowding out. If the government decreases its expenditures by $100 billion, then by how much and in which direction does AD change?

Group of answer choices

$500 billion, up

$125 billion, up

$100 billion, down

$500 billion, down

$125 billion, down