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

total strength of the student = 1.24876

Step-by-step explanation:

individual spend by student is 2,760 pound

total spending = 50.45 million

therefore total student strength is

`(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}* \textup{Multiplier} =\textup{Total impact on the economy}`

`$50.45* {Multiplier} =$63million`

`Multiplier =(63)/(50.45) = 1.24876`

total strength of the student = 1.24876