Answer to Question #169535 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

If £50.45 million are spent in a local economy and £63 million are spent owing to the effect of students’ impact, then the size of the student spending multiplier is;

$=\frac{63}{50.45}$ $=1.25$