chapter  50
7 Pages

The expected economic effects of football special events

The multiplier measures the impact of extra expenditure introduced into an economy. A stadium vendor who earns, say $10 from a spectator may spend $5 of that $10. If this $5 is spent locally, it is considered to be an input of$5 to local income, half of which may be spent locally, and so on. Adding up this flow of money, the total economic activity in the region is $20. Thus, $10 has generated $20 and the multiplier would be considered to be 2.00. The usual formula here is M= 1 /( 1c) where M= the multiplier; and c= the marginal propensity to consume.