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Assume an urban cluster's income has grown from $20 million to $32.4 million, supposedly due to an $1.6 million increase in exports of a crucial
Assume an urban cluster's income has grown from $20 million to $32.4 million, supposedly due to an $1.6 million increase in exports of a crucial industry.
a) What is the implied income multiplier?
b) Is this possible? If yes, what is the implied marginal propensity to consume locally? If no, why not?
Please include work. Thank you!
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