Answer:
$50 billion
Explanation:
We know that,
Increase in aggregate demand would be
= Additional investment spend × (1 ÷ 1 - MPC)
= $20 billion × (1 ÷ 1 - 0.6)
= $20 billion × 2.5
= $50 billion
We simply applied the Increase in aggregate demand formula by taking into account the additional investment spending amount and the MPC so that the exact amount can be achieved.
