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An application of infinite geometric series: The government has decided to give a $1,000 tax rebate to each ho order to stimulate the economy. The government statistics say that each household will spend 80% of the rebate i and services. The businesses and individuals who benefited from that 80% will then spend 80% of what they receive 1. The result is called the multiplier effect. What is the total effect of the rebate on the economy?

An application of infinite geometric series: The government has decided to give a $1,000 tax rebate to each ho order to stimulate the economy. The government statistics say that each household will spend 80% of the rebate i and services. The businesses and individuals who benefited from that 80% will then spend 80% of what they receive 1. The result is called the multiplier effect. What is the total effect of the rebate on the economy?

Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter10: Sequences, Series, And Probability
Section10.3: Geometric Sequences
Problem 76E
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An application of infinite geometric series: The government has decided to give a $1,000 tax rebate to each household in order to stimulate the economy. The government statistics say that each household will spend 80% of the rebate in goods and services. The businesses and individuals who benefited from that 80% will then spend 80% of what they received and so on. The result is called the multiplier effect. What is the total effect of the rebate on the economy?
Transcribed Image Text:An application of infinite geometric series: The government has decided to give a $1,000 tax rebate to each household in order to stimulate the economy. The government statistics say that each household will spend 80% of the rebate in goods and services. The businesses and individuals who benefited from that 80% will then spend 80% of what they received and so on. The result is called the multiplier effect. What is the total effect of the rebate on the economy?
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