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Suppose that out of the original $20,000 of government spending, $8450 will be recycled back into...

Suppose that out of the original $20,000 of government spending, $8450 will be recycled back into purchases of domestically produced goods and services in the second round, and $3570.12 is spent in the third round.

How much is spent in the 5th round?

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Answer #1

Answer:-

Spending Factors = $8450 / $20,000

                             =0.4225 or 42.25%

How much is spent in fourth round =$3570.12 * 0.4225 = $1508.38

How much is spent in the 5th round=$1508.38 * 0.4225 = $637.29

$637.29 is spent in the 5th round.

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