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In Goa, India, the multiplier effect of iron ore exports is calculated to be 1.62 (Ta, 2003). Calculate the impact of an...

In Goa, India, the multiplier effect of iron ore exports is calculated to be 1.62 (Ta, 2003). Calculate the impact of an additional 1,000 rupees of iron ore exports on the economy of Goa.

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Answer #1

The impact of an additional 1,000 rupees of iron ore exports on the economy of Goa = 1.62 * 1,000 = 1,620 rupees

Thus, the impact of an additional 1,000 rupees of iron ore exports on the economy of Goa increases the domestic GDP by 1,620 rupees.

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