3. Extensions (a) A number of facts about an economy might be relevant for the multiplier beyond those reflected in the simple model. What other factors might influence the size of the multiplier? Which are more likely to make the real-world multiplier larger, and which are likely to make it smaller? (b) Estimates of the multiplier for the United States often arrive at a figure of around 1.5. But not every country is like the US; most countries are smaller and poorer.

How might our estimate of the multiplier be different in a small, lower- or middle- income country? In your answer, you should say which specific parameters in the

model of the multiplier we would expect to be larger and smaller and why, and how this would affect the value of the multiplier.