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

Answer:

total strength of the student = 1.24876

Explanation:

individual spend by student is 2,760 pound

total spending = 50.45 million

therefore total student strength is

$\frac{50,450,000}{2,760} = 18,279$

here this total strength f student act as multiplier.To get total impact multiplier which is constant value is multiplied by total spending..

in the question, total Impact is greater than total spending. Thus:

$\textup{Total spendings}\times \textup{Multiplier} =\textup{Total impact on the economy}$

$50.45\times {Multiplier} = 63million$

$Multiplier =\frac{63}{50.45} = 1.24876$

total strength of the student = 1.24876