The National Restaurant Association states that the restaurant industry has 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 is the amount of total economic activity generated by every dollar spent in the industry. According to the information given, every dollar spent in restaurants generates $2.05 in spending in the economy. Therefore, the spending multiplier for the restaurant industry is 2.05.

The National Restaurant Association States That the Restaurant Industry Has