Answer to Question #168594 in Microeconomics for Jane

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

The student spending multiplier is 1.25:

${63 \over 50.45}\approx1.25$