C. Al-Mawared Islamic investment bank accepts deposited savings of $150mln. The bank invests this in the form of equity shares. Producing firms use this capital to buy machinery and raw materials, and to expand their production capacity. The recipients of the $150mln, as a result of sales of their goods and services, are assumed to save 18% of their income. Required: 1. Calculate the saving multiplier and explain its relationship to the average saving ratio then the relationship between saving ratio and the accumulated savings.

2. Quantify the effect of the saving multiplier on the initial saving deposit of $150mln.