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- 2. Suppose the marginal propensity to consume is 0.60 and government purchases increase by $40 billion. In the "Total Expenditure/Total Production" model, 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 $100billion.d. The TE curve shifts upward by $40 billion, and Real GDP increases by $100 billion.