Q: What does the simple multiplier equal?

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Given: ROA = 10%, Profit margin = 2%, ROE = 15% ROA = Profit margin x Asset Turnover Therefore, Asset Turnover = ROA / Profit margin = 10 / 2 = 5% ROE = Profit margin x Asset Turnover x Equity multiplier 15 = 2 x 5 x Equity Multiplier 15 / 10 = Equity Multiplier Equity Multiplier = 1.05

No such multiplier is possible.78 decreased by 78 is 0, so the decimal multiplier would to be 0. 156 decreased by 78 is 78 so the multiplier is 0.5. 1000000 decreased by 78 is 999922 so the multiplier is 0.999922 and so on. A different multiplier in each case.

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Actually it is the change in the equilibrium expenditure divided by the change in autonomous expenditure. That will equal the expenditure multiplier.

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BALANCED-BUDGET MULTIPLIER:A measure of the change in aggregate production caused by equal changes in government purchases and taxes. The balanced-budget multiplier is equal to one, meaning that the multiplier effect of a change in taxes offsets all but the initial production triggered by the change in government purchases. This multiplier is the combination of the expenditures multiplier, which measures the change in aggregate production caused by changes in an autonomous aggregate expenditure, and the tax multiplier which measures the change in aggregate production caused by changes in taxes.

Since ROE = ROA (Equity Multiplier) in order for ROE to equal ROA the equity multiplier must be one. In other words, the total assets to total shareholders' equity ratio must be one.

The simple multiplier implies that investment is the central determinant of output. The super multiplier combines the multiplier with the accelerator that indicates that investment is not autonomous, but is part of derived demand. Hence, the super multiplier indicates that capacity adjusted output is determined by autonomous demand. Autonomous demand in the case of the super multiplier would correspond to government spending, exports and some elements of consumption (particularly the wealthy whose consumption is not constrained by income). The practical difference is that not only demand determines output in the short run, but also in the long run. The economic system is effectively demand driven and Keynes' Principle of Effective Demand substitutes Say's Law.

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super multiplier refers to interaction of the multiplier and accelerator.

Well, i'd say its both. depends on the case to specify when it is a force multiplier or a distance multiplier.

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