Question

Suppose that out of the original $15,000 of government spending, $6645 will be recycled back into...

Suppose that out of the original $15,000 of government spending, $6645 will be recycled back into purchases of domestically produced goods and services in the second round, and $2943.73 is spent in the third round.

How much is spent in the 7th round?

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Answer #1

Answer:-

Spending Factors = $6645 / $15,000

                             =0.443 or 44.3%

How much is spent in fourth round = $2943.73 * 0.443 = $1304.07

How much is spent in the 5th round = $1304.07 * 0.443 = $577.70

How much is spent in in the 6th round = $577.70 * 0.443 = $255.92

How much is spent in in the 7th round = $255.92 * 0.443 = $113.37

$113.37 is spent in the 7th round.

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