Respuesta :

Answer:

The GDP will increase by $500.

Explanation:

The marginal propensity to consume measures the change in spending due to a change in disposable income.

If the government increases its spending, it would increase total spending in the economy by the size of spending multiplier. In other words, the spending multiplier shows how much the GDP will change due to a change in government spending.

The spending multiplier can be expressed as [tex]\frac{1}{1-MPC}[/tex] or [tex]\frac{1}{MPS}[/tex].

Increase in GDP

= [tex]\frac{1}{1-MPC} \times \Delta G[/tex]

= [tex]\frac{1}{1-0.8}\times 100[/tex]

= $500

So, the GDP will increase by $500.

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Is known :

ΔTC = $ 800 million (yield of $ 100.8 billion - $ 100 billion)

ΔQ =?

Information:

MC = Marginal Fee

ΔTC = Change in Total Costs

ΔQ = Change in Amount of Output

ΔQ = ΔTC * MC

ΔQ = $ 800 million * 0.80

ΔQ = 640 million units

Further explanation

Marginal Costs are additional costs incurred when producing one additional product unit. This Marginal Cost shows the level at which the total cost of product changes when production increases by one unit. The purpose of analyzing these marginal costs is to determine at what point a company can achieve economies of scale.

Marginal costs are very important in the business decision-making process where management must make decisions about the allocation of resources in the production process. For example, when management needs to decide whether or not to increase production, they must compare marginal costs with marginal revenue that will be realized by additional units of output. This comparison is needed to determine whether the company will add the number of production units.

It should be noted that for most production scenarios, production costs are not at the beginning of production and then decrease with increasing amounts of certain products.

Learn more

marginal cost https://brainly.com/question/13944395

business decision-making https://brainly.com/question/13990137

Details

Class: high school

Subject: Business

Keywords: cost, marginal, business