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Economics The Magic Soft software company has a proposal to the city council of Alva, Florida, to relocate there. The proposal claims that the company will generate $3.3 million for the local economy by the $1 million in salaries that will be paid. The city council estimates that 70% of the salaries will be spent in the local community, and 70% of that money will again be spent in the community, and so on.

a. According to the city council's estimates, is the claim made by Magic Soft accurate? Explain.

b. What is the correct estimate of the amount generated to the local economy?

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