The government claims to be able to stimulate the economy substantially by giving each taxpayer a $200 tax rebate. They reason that 90% of this amount, or (0.90)($200) = $180, will be spent. An additional 90% of this $180 will then be spent, and so on.
(a) If the government claim is true, how much total expenditure will result from this $200 rebate?
(b) Calculate the value of the multiplier.