Question

In Goa, India the multiplier effect of iron ore export is calculated to be 1.62. Vidyut kumar ta, iron ore mining gives impetys to Goa's economy Times of India, April 30 2003. Calculate the impact of an additional 1000 rupees of iron ore exports on the economy of Goa

Answer 1

$\Delta$ GDP for each price level=multiplier $\Delta$ (component of AD)

$\Delta$ GDP for each price level=$1.62\times1000=1620 rupees$