Multiplier Suppose that, throughout the U.S. economy,individuals spend 90% of every additional dollar that theyearn. Economists would say that an individual’s marginalpropensity to consume is 0.90. For example, if Jane earns anadditional dollar, she will spend 0.9112 = $0.90 of it. Theindividual who earns $0.90 (from Jane) will spend 90% of it,or $0.81. This process of spending continues and results in aninfinite geometric series as follows : 1, 0.90, 0.902 , 0.903 , 0.904 ,.....The sum of this infinite geometric series is called the multiplier. What is the multiplier if individuals spend 90% of every additional dollar that they earn?
Unitary Method
The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.
Speed, Time, and Distance
Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 miles away.
Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
Multiplier Suppose that, throughout the U.S. economy,
individuals spend 90% of every additional dollar that they
earn. Economists would say that an individual’s marginal
propensity to consume is 0.90. For example, if Jane earns an
additional dollar, she will spend 0.9112 = $0.90 of it. The
individual who earns $0.90 (from Jane) will spend 90% of it,
or $0.81. This process of spending continues and results in an
infinite geometric series as follows : 1, 0.90, 0.902 , 0.903 , 0.904 ,.....
The sum of this infinite geometric series is called the
multiplier. What is the multiplier if individuals spend 90% of
every additional dollar that they earn?
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