Answer:

Value of an Output Multiplier

The value of the output multiplier is calculated by dividing the change in regional GDP (due to the increase in tourism) by the change in spending (by tourists). In this case, the output multiplier is calculated as follows: ($1.237 billion + $7 million) / ($7 million) = 175.286. This means that for every dollar spent by tourists, the regional GDP of the destination increases by $175.286.

Supporting Subsections

Calculating change in regional GDP

The change in regional GDP is calculated by taking the total spending by tourists and multiplying it by the growth rate. In this case, the change in regional GDP is calculated as follows: 20,000 tourists x $350 = $7 million, and $7 million x 1.3% = $91,000. This means that the regional GDP of the destination increased by $91,000 due to the increase in tourism.

Calculating change in spending

The change in spending is calculated by taking the total spending by tourists and subtracting it from the regional GDP of the destination in 2022. In this case, the change in spending is calculated as follows: $1.237 billion – $7 million = $7 million. This means that the spending by tourists increased by $7 million from 2022 to 2023.

Calculating the output multiplier

The output multiplier is calculated by taking the change in regional GDP and dividing it by the change in spending. In this case, the output multiplier is calculated as follows: ($1.237 billion + $91,000) / ($7 million) = 175.286. This means that for every dollar spent by tourists, the regional GDP of the destination increases by $175.286.

Conclusion

In conclusion, the value of the output multiplier for the destination is 175.286. This means that for every dollar spent by tourists, the regional GDP of the destination increases by $175.286.

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