President Bush is successful in passing a $5 billion tax cut. Assume that taxes are fixed, the economy is closed, and the marginal propensity to consume is 0.75. What happens to equilibrium GDP?
A) There is a $15 billion increase in equilibrium GDP.
B) There is a $20 billion decrease in equilibrium GDP.
C) There is a $20 billion increase in equilibrium GDP.
D) There is a $15 billion decrease in equilibrium GDP.