Question

Disaster Relief If the federal government provides $\$ 300$ million in disaster relief to the people of Louisiana after a hurricane, then $80 \%$ of that money is spent in Louisiana. If the money is respent over and over at a rate of $80 \%$ in Louisiana, then what is the total economic impact of the $\$ 300$ million on the state?

Name: Problem 104, Chapter 11: Precalculus Functions and Graphs
Uploaded: 2020-04-09T09:55:25-08:00
Duration: 1 min 32 s
Channel: Tony Ni
Description: Disaster Relief If the federal government provides 300 million in disaster relief to the people of Louisiana after a hurricane, then 80 % of that money is spent in Louisiana. If the money is respent over and over at a rate of 80 % in Louisiana, then what is the total economic impact of the 300 million on the state?

   Disaster Relief If the federal government provides $\$ 300$ million in disaster relief to the people of Louisiana after a hurricane, then $80 \%$ of that money is spent in Louisiana. If the money is respent over and over at a rate of $80 \%$ in Louisiana, then what is the total economic impact of the $\$ 300$ million on the state?

Precalculus Functions and Graphs

Mark Dugopolski 4th Edition

Chapter 11, Problem 104

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Solved by Expert Tony Ni

04/09/2020

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Step 1: The initial amount of money spent in Louisiana is $\$300$ million. Show more…

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Disaster Relief If the federal government provides $\$ 300$ million in disaster relief to the people of Louisiana after a hurricane, then $80 \%$ of that money is spent in Louisiana. If the money is respent over and over at a rate of $80 \%$ in Louisiana, then what is the total economic impact of the $\$ 300$ million on the state?

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Key Concepts

Multiplier Effect

The multiplier effect describes how an initial injection of spending generates additional economic activity through subsequent rounds of spending. In disaster relief, the initial federal spending is re-spent within the community multiple times, leading to a total economic impact that is larger than the initial amount provided.

Geometric Series

A geometric series is a mathematical concept where each term is a fixed multiple of the previous term. In the context of repeated spending, the infinite series formed by the ongoing re-spending process can be summed using the formula for an infinite geometric series, which captures the cumulative effect of the multiplier.

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