Asked by Emily

Why is the real investment multiplier smaller for local communities then for the nation?

Answers

Answered by economyst
Think about how the multiplier works; how in increase in spending causes increases in someone's income which, in turn, increases their spending. If someone buys a good or service outside of their own community, then somebody outside of the community has an increase in income. However, the spending is still, likely, inside the nation.
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