Select ONE (1) of the following questions for a 10-minute answer:

1. Briefly account for the principal analytical points made in Tiebout's (Community Economic Base Study) chapter 6.
   Check original source!

   
   

2. How come that the direct coefficient table for the Holokuluku economy (distributed in class) has 10 rows but only 8 columns? Be specific and explicit!
   Check Schaffer reading [Holukuluku tables are "open" with respect to Imports (of course!) and Households (not so "of course"!) What does this mean?]

   
   

3. Is it important to distinguish between multipliers and multiplier effects? Could it be that a large multiplier yields only a small multiplier effect? Why or why not? Explain in detail.
   Multipliers are multiplied by the respective "exogenous" variable (normally exports) to arrive at the "total" (employment or income). If you then deduct the exogenous variable, you have isolated the "effects" which were created by the multiplier. Consequently, both the multiplier and the exogenous variable can be independently large or small. In other words, the size of the multiplier effect depends on both the size of the multiplier and the size of the exogenous stimulus. [ Multiplier versus Multiplier Effect]