Suppose the MPC=0.06 and gov purchases increase by $40 billion. According to Keynesian theory which of the following is true-
A. The TE curve shifts downward by 40 billion and Real GDP decreases by 40 billion.
B. The TE curve shifts upward by 40 billion, and Real GDP increases by 40 billion.
C. The TE curve shifts downward by 40 billion, and Real GDP decreases by 100 billion.
D. The TE curve shifts upward by 40 billion, and Real GDP increases by 100 billion.