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9 October, 07:07

if a $215 increase in investment spending creates $215 of new income in the first round of the multiplier process and $67 in the second round, what is the multiplier in this economy?

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  1. 9 October, 07:26
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    The multiplier in this economy is 1.45.

    Explanation:

    New income in the first round = $215

    New income in the second round = $67

    The difference = $215 - $67

    =$148

    The multiplier in this economy = 215/148

    The multiplier = 1.45
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