Given that mpc = 0.8 and additional G = $5 billion, the increase in National Income is

The formula for the multiplier ($k$) is:

$$k = \frac{1}{1 - \text{MPC}}$$

Given MPC = 0.8:

$$k = \frac{1}{1 - 0.8}$$ $$k = \frac{1}{0.2}$$ $$k = 5$$

The increase in National Income ($\Delta Y$) is the multiplier multiplied by the additional government spending ($\Delta G$):

$$\Delta Y = k \times \Delta G$$

Given \Delta G = \5 \text{ billion}: $$\Delta Y = 5 \times \5 \text{ billion}$$\Delta Y = $25 \text{ billion}$$

The increase in National Income is $25 billion.

The correct option is C. $25 billion.