The National Restaurant Association states that the restaurant industry has an economic effect of more than $1.7 trillion annually in the United States,with every dollar spent in restaurants generating an estimated total of $2.05 in spending in the economy.This indicates that the spending multiplier for the restaurant industry is equal to
A)1.21.
B)1.70.
C)2.05.
D)4.25.

Question

Quizplus · Accepted Answer

The spending multiplier for the restaurant industry is calculated by dividing the total economic effect ($2.05) by the initial spending ($1.00), which gives a result of 2.05. Therefore, the correct choice is C.

The National Restaurant Association States That the Restaurant Industry Has