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Every dollar the government spends creates a greater than one dollar change in economic output
Wiki User
∙ 12y ago
The main idea of the multiplier effect is that an initial increase in spending or investment leads to further economic activity and growth. This occurs as the money circulates through the economy, creating a ripple effect as it is spent and respent by individuals and businesses.
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What is multiplier effect in the mining industry?
The multiplier effect, is when one job in the mining industry creates 4 new jobs in other industries
Does fiscal policy have a multiplier effect?
yes
What is a travel multiplier?
The travel multiplier measures the effect of the initial tourism spending and the chain of spending that follows.
What does multiplier effect mean?
The multiplier effect describes how an increase in some economic activity starts a chain reaction that generates more activity than the original increase. The multiplier effect demonstrates the impact that reserve requirements set by the Federal Reserve have on the U.S. money supply.
What do taxes and transfer payments act as?
Multiplier Effect
What is the relevance of multiplier effect to government policy in economics?
Local, State, and National Governments typically will attempt to shape policy around the idea of a multiplier effect if they understand the concept. The idea is of course that policies will attract more spending in their respective forum and so enjoy the benefits of the monetary multiplier. This means for example that one dollar ($1) spent in a local economy such as Atlanta may generate as much as $4-$10 in economic growth to the local community. This same concept can be true for spending on the state and national levels.
What is the main idea of factors affect climate?
greenhouse effect
What is the multiplier effect of 1000000 of payroll on the local economy?
4568255
How do you calculate the multiplier effect?
by dividing investment with 1 subtract consumption function
What best characterizes the main idea of any reading passage?
The main idea of a paragraph is what that specific paragraph is about. You have a main idea of the whole writing, but each paragraph (or "passage") has its own main idea, or main point, and each paragraph expands on the whole.
What are some reading structures?
The main text structures include, main idea and supporting detail, chronological order, compare and contrast, problem and solution, and cause and effect.
When alcohol affects the action of another drug or medicine being taken it is called?
The Multiplier Effect
