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Describe the multiplier effect and its effects on the economy of a tourism destination. Use your own words and povide at least two examples.
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- Another important aspect of Tourism Economics is the multiplier effect, which refers to the additional economic activity generated by tourism spending. When tourists spend money in a destination, it circulates through the local economy, benefiting not just the direct recipients of this spending but also other businesses and their employees. For example, tourists spending money in local restaurants support not only the restaurant staff but also local suppliers and their workers. The multiplier effect in Tourism Economics is essential because it: A) Reduces overall economic activity B) Only benefits the tourism sector C) Generates additional economic activity beyond the initial spending D) Leads to economic stagnationNo more than five sentence. Briefly describe/discuss what are the positive impact of the tourism Multiplier effectIn the goods market when C(Yd) = c0 + c1Yd, the multiplier is bigger when:A. The marginal propensity to consume (c1) is smaller.B. The marginal propensity to consume (c1) is larger.C. The exogenous component of consumption (c0) is larger.D. The exogenous component of consumption (c0) is smaller.E. None of the above.
- Is the relationship between changes in spending and changes in real GDP in the multiplier effect a direction (positive) relationship or is it an inverse (negative) relation- ship?Which of the following is a true statement about the multiplier? The formula for the multiplier overstates the real world multiplier when we take into account the impact of changes in GDP on imports, inflation and the interest rate. The larger the MPC, the smaller the multiplier. The multiplier is the ratio of the change in spending to the change in GDP. The multiplier makes the economy less sensitive to changes in autonomous expenditure.Using the Lagrange multiplier, calculate the marginal cost ofproducing an additional unit of output at the cost minimising point?
- There might be many factors (economic and non-economic) that affect the size of the multiplier. What are some that you think could influence its size? Which ones do you think would make it larger, and which are more likely to make it smaller?As the multiplier process is working on the demand side, a. firms will meet the additional demand without raising prices. b. firms will not meet the additional demand. c. firms will meet the additional demand only by raising prices. d. the multiplier process will cease creating demandFor the multiplier to be positive what condition must be satisfied?
- Question Another important aspect of Tourism Economics is the multiplier effect, which refers to the additional economic activity generated by tourism spending. When tourists spend money in a destination, it circulates through the local economy, benefiting not just the direct recipients of this spending but also other businesses and their employees. For example, tourists spending money in local restaurants support not only the restaurant staff but also local suppliers and their workers. The multiplier effect in Tourism Economics is essential because it: A) Reduces overall economic activity B) Only benefits the tourism sector C) Generates additional economic activity beyond the initial spending D) Leads to economic stagnationWhat is the definition for the multiplier processSuppose that Kim K decides to spend $30,000 on an American‑made purse instead of donating it to Haitian earthquake relief. Assume that the multiplier is 1.91.9. How much will GDP rise when Kim K buys her purse according to the multiplier effect? $$ Buying the purse increases America's GDP donating the money to Haitian earthquake relief. Suppose she instead donated to tornado relief in Joplin, MO. Buying the purse increases GDP spending on tornado relief.
