Answer to Question #51247 in Macroeconomics for haruna

Question

The Nottinghamshire Research Observatory in England calculated that students who attend Nottingham Technical 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.

Answer 1

If the Nottinghamshire Research Observatory in England calculated that students who attend Nottingham Technical University spend about £2,760 each in the local economy for a total of £50.45 million, and if in total, the impact of their spending on the local economy is £63 million, the size of the student spending multiplier is m = 63/50.45 = 1.25.