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Get answer: When money is spent on goods and services, those who receive the money also

Single Variable Calculus: Early Transcendentals | 8th Edition | ISBN: 9781305270336 | Authors: James Stewart ISBN: 9781305270336 484

Solution for problem 73 Chapter 11.2

Single Variable Calculus: Early Transcendentals | 8th Edition

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Single Variable Calculus: Early Transcendentals | 8th Edition | ISBN: 9781305270336 | Authors: James Stewart

Single Variable Calculus: Early Transcendentals | 8th Edition

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Problem 73

When money is spent on goods and services, those who receive the money also spend some of it. The people receiving some of the twice-spent money will spend some of that, and so on. Economists call this chain reaction the multiplier effect. In a hypothetical isolated community, the local government begins the process by spending D dollars. Suppose that each recipient of spent money spends 100c% and saves 100s% of the money that he or she receives. The values c and s are called the marginal propensity to consume and the marginal propensity to save and, of course, c 1 s 1. (a) Let Sn be the total spending that has been generated after n transactions. Find an equation for Sn. (b) Show that limnl` Sn kD, where k 1ys. The number k is called the multiplier. What is the multiplier if the marginal propensity to consume is 80%? Note: The federal government uses this principle to justify deficit spending. Banks use this principle to justify lending a large percentage of the money that they receive in deposits.

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Class Activity Chapter 2 1 Class Activities Chapter 2 1. Dr. Smith has concluded the initial portion of data collection on her study into rural crime in America. She has placed the task of identifying the various types of data for a random selection of a few of her variables to her new research assistant. Help Dr. Smith’s new assistant by identifying the level of measurement of each of the variables listed in the table below. Income # Homicides Sex Age Temperature Suspect °F $20,215 17 F 21 56 Wendy $150,987 22

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Chapter 11.2, Problem 73 is Solved
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Textbook: Single Variable Calculus: Early Transcendentals
Edition: 8
Author: James Stewart
ISBN: 9781305270336

This textbook survival guide was created for the textbook: Single Variable Calculus: Early Transcendentals, edition: 8. Since the solution to 73 from 11.2 chapter was answered, more than 222 students have viewed the full step-by-step answer. The answer to “When money is spent on goods and services, those who receive the money also spend some of it. The people receiving some of the twice-spent money will spend some of that, and so on. Economists call this chain reaction the multiplier effect. In a hypothetical isolated community, the local government begins the process by spending D dollars. Suppose that each recipient of spent money spends 100c% and saves 100s% of the money that he or she receives. The values c and s are called the marginal propensity to consume and the marginal propensity to save and, of course, c 1 s 1. (a) Let Sn be the total spending that has been generated after n transactions. Find an equation for Sn. (b) Show that limnl` Sn kD, where k 1ys. The number k is called the multiplier. What is the multiplier if the marginal propensity to consume is 80%? Note: The federal government uses this principle to justify deficit spending. Banks use this principle to justify lending a large percentage of the money that they receive in deposits.” is broken down into a number of easy to follow steps, and 178 words. Single Variable Calculus: Early Transcendentals was written by and is associated to the ISBN: 9781305270336. The full step-by-step solution to problem: 73 from chapter: 11.2 was answered by , our top Calculus solution expert on 03/19/18, 03:29PM. This full solution covers the following key subjects: . This expansive textbook survival guide covers 95 chapters, and 5427 solutions.

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