The magnitude of an economic base multiplier depends upon the amount of money that "leaks" out through expenditures outside of the city limits. The economic multiplier tends to be higher with each of the following EXCEPT:
A) A higher percentage of local household income is respent within the city.
B) The larger the city is.
C) The less isolated the city is from other cities.
D) The more tourism a city brings in.

Question

Quizplus · Accepted Answer

The economic multiplier tends to be lower when a city is less isolated because more money leaks out to nearby cities through purchases and investments, reducing the multiplier effect within the city itself.

The Magnitude of an Economic Base Multiplier Depends Upon the Amount