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In economics, the multiplier effect refers to the fitct that when there is an injection of money to consumers, the consumers spend a certain percentage
In economics, the multiplier effect refers to the fitct that when there is an injection of money to consumers, the consumers spend a certain percentage of it. That amount recirculates through the economy and adds additional income, which comes back to the consumers and of which they spend the same percentage. This process repeats indefinitely, circulating additional money through the cconotny. Suppose that in order to stimulate the economy, the government institutes a tax cut of $6 billion. If taxpayers are known to save 11% of any additional moncy they receive, and to spend 89%, how much total moncy (T) will be circulated through the economy by thas single 56 billion tax cut? (Enter your answer rounded to the nearest whole number.)
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