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
or
£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.
oops should be in $ not £, eek!
To calculate the size of the student spending multiplier, you need to use the formula: MPC = impact of spending / actual spend by students.
In this case, the impact of spending on the local economy is given as $63 million, and the actual spend by students is $50.45 million.
So, to calculate the student spending multiplier, you divide the impact of spending ($63 million) by the actual spend by students ($50.45 million):
MPC = $63 million / $50.45 million
Calculating this, you get an MPC value of 1.24876114965.
To round the value to two decimal places, you end up with MPC = 1.25.
Therefore, the size of the student spending multiplier in this case is 1.25.