An economist published a research paper arguing that the mul

An economist published a research paper arguing that the multiplier from a proposed fiscal stimulus of 25,000,000 will be 1.5. in other words the ratio of the total economic imact of the stimulus spending to the original amount spend by the goverment is 1.15. what share of the stimulus did the economist assume was spent

Solution

ratio of the total economic imact of the stimulus spending to the original amount spend by the goverment is 1.5

therefore

stimulus spent / original spending = 1.5

=> original spending= stimulus spent/ 1.5 =16666666.666