Call Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of
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is the total implied increase in economic spending activity from a government stimulus of
billion
<u>Explanation: </u>
The median product preference tests the increase in expenditure due to changes in availability.
In increasing government expenditure, total economic investment would be increased by the scale of the budget multiplier. In other terms, the expenditure equation indicates how much GDP can increase as government expenditure increases.
The spending multiplier can be expressed as
So, the total implied increase in economic spending is
In economics, marginal propensity to consume (MPC) is the proportion of an aggregate raise in pay that consumer spends on the consumption of services and goods, as opposed to saving it.
C.
Allocative efficiency in simple terms basically means there is no wastage, therefore if producers produce at price equals marginal coat, they are producing at the point where consumers are willing to pay that final price. Refer to the poorly drawn diagram for reference.
Allocative efficiency in simple terms basically means there is no wastage, therefore if producers produce at price equals marginal coat, they are producing at the point where consumers are willing to pay that final price. Refer to the poorly drawn diagram for reference.