question archive According to Alaskan state economist Mark Edwards, the multiplier effect of Alaska's trade with Japan is such that for every $1 billion exported from Alaska to Japan another $600 million is added to the state's economy
According to Alaskan state economist Mark Edwards, the multiplier effect of Alaska's trade with Japan is such that for every $1 billion exported from Alaska to Japan another $600 million is added to the state's economy
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According to Alaskan state economist Mark Edwards, the multiplier effect of Alaska's trade with Japan is such that for every $1 billion exported from Alaska to Japan another $600 million is added to the state's economy.Matt Volz, "Trade Officials Hopeful for Japanese Recovery," Associated Press and Local Wire, June 22, 2004, BC cycle. Calculate the size of the export multiplier.
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Export multiplier = 1.67
Step-by-step explanation
The export multiplier can be computed as:
Export multiplier = Increase in export/Increase in income
Increase in export = $1 billion = $1,000,000,000
Increase in income = $600 million = $600,000,000
Therefore:
Export multiplier = $1,000,000,000/$600,000,000
= 1.6666667
= 1.67
