Consider a demand-determined model, with a marginal propensity to consume of 0.85, a marginal propensity to import of 0.25 and a tax rate of 0.35. Following the simple model presented in class (and in the Ragan text used in EC140), what is the simple multiplier in this economy? (Answer to two figures after the decimal point - ie. 1.43.)

(Secondary question to help you study - what additional information would you need to calculate the multiplier, as opposed to the simple multiplier? You should be able to explain that difference