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am i right? don't want to hand in wrong homework again, my mom will kill me

A research firm calculated that students who attend University spend about $2,760 each in the local economy for a total of $50.45 million. In total, the impact of their spending on the local economy is $63 million. Calculate the size of the student spending multiplier.

MPC =impact of spending/actual spend by students


£63m/£50.45m = 1.24876114965, rounding to two decimal places we end up with

£63m/£50.45m = 1.25

So in this instance the multiplier is 1.25.

  • economics -

    oops should be in $ not £, eek!

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