A column in the New York Times in 2017 noted that Tesla
was expanding both its California automobile factory,
where it was beginning to produce its Model 3 electric
cars, and its Nevada “Gigafactory,” where it was producing
lithium-ion batteries for cars and other uses. The article
quoted an investment analyst as saying, “I don’t know
what kind of multiplier you put on that, but it’s a significant boost to the economy.”
a. What does the analyst mean by a multiplier?
b. Why would Tesla’s engaging in this investment spending result in a significant boost to the economy?
c. Why might the analyst have been unsure of the size of
the multiplier in this case?
Source: James B. Stewart, “Elon Musk Has Trump’s Ear, and Wall
Street Takes Note,” New York Times, January 26, 2017.