Question

In order to improve its economy, a city's mayor convinced a company to open a new...

In order to improve its economy, a city's mayor convinced a company to open a new branch in his city. As a consequence, 1000 more people will be employed. It is a well-known tradition of that city to spend only 95% of one?s income and save the remaining 5%. For example, if an employee gets 100 per year, they will spend 95 of those 100, and in turn 95% of those 95 will be spent, and so on.

• If each employee will get 100,000 how much total expenditure will result from the new branch?

• Calculate the value of the multiplier.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT