Answer: $200
Explanation:
From the information given, since the MPC is 0.75 and the change in GDP is $800, the change in the government spending will then be:
$800 = 1/(1 - 0.75) × ∆G
$800 = 1/0.25 × ∆G
$800 = 4 × ∆G
∆G = $800/4
∆G = $200
The government spending will be increased by $200
The government spending should be increased by $200
Gross domestic product (GDP) refers to the total market value of goods and services that is produced in a country's during a period of time.
Given the above information, since the MPC is 0.75 and the change in GDP is $800,
The change in the government spending will then be:
$800 = 1 / (1 - 0.75) × ∆G
$800 = 1 / 0.25 × ∆G
$800 = 4 × ∆G
∆G = $800/4
∆G = $200
The government spending should be increased by $200
Learn more about Gross domestic product here : https://brainly.com/question/1383956
