Answer to Question #58357 in Macroeconomics for juachi

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 £50.45 million are spent in a local economy and £63 million are spent due to the effect of students’ impact, then the size of the student spending multiplier will be:
63 : 50.45 = 1.25.