11. When money is spent on goods and services, those that receive the money also spend some
of it. The people receiving some of the twice-spent money will spend some of that, and so
on. Economists call this chain reaction the multiplier effect. In a hypothetical isolated
community, the local government begins the process by spending D dollars. Suppose that
each recipient of spent money spends and saves of the money that he or
she receives. The values c and s are called the marginal propensity to consume and the
marginal propensity to save and, of course, .
The number k = 1/s is called the multiplier. What is the multiplier if the marginal propensity
to consume is ?