2.
Multiplier = 1 / (1-0.8)
= 1/ 0.2
= 5

Thus, in order to increase the GDP by $25 million, the government must spend $5billion

Marginal Propensity to consume X tax cut = 5 billion
0.8 X tax cut = 5
tax cut = 6.25billion

There is this difference because unlike the government spending, the money gained as a result of the tax cut is not all consumed.

3. Decrease public spending or increase taxes. A conservative economist would favor the latter option while the liberal economist would favor the former