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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › multiplier effect
Hello sir
Regarding the illustration you have given on multiplier effect in chapter 2,i dont understand how the customers have 19000 available for spending. Could you please explain it again?
The person who has put $10,000 in the bank is able to spend the money.
The person who borrowed $9,000 in the bank is also able to spend the amount borrowed.
Therefore between them they have $19,000 available to spend. (They obviously might not spend it – the person who put $10,000 in the bank might decide to leave it there – but it is available for spending.)