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Multiplier principle. Suppose that Congress enacts a one-time-only 10% tax rebate that is expected to infuse $y billion, 5 ≤ y ≤ 7, into the economy. If every person and every corporation is expected to spend a proportion x, 0.6 ≤ x ≤ 0.8, of each dollar received, then, by the multiplier principle in economics, the total amount of spending S (in billions of dollars) generated by this tax rebate is given by
What is the average total amount of spending for the indicated ranges of the values of x and y? Set up a double integral and evaluate it.
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Calculus for Business, Economics, Life Sciences, and Social Sciences - Boston U.
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