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What is the concept of Multiplier?

Updated: 12/14/2022
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The concept of Multiplier highlights the effects of initial investment upon national income through changes in consumption expenditure.

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Q: What is the concept of Multiplier?
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How is the multiplier concept computed including MPC?

100


Difference between static and dynamic multiplier?

The concept of static multiplier implies that changes in investment causes change in income instantaneously. It means that there is no time lag between the change in investment and the change in income. It implies that the moment a rupee is spent on investment project, society's income increases by a multiple. Let us explain the concept of the dynamic multiplier also known as period and sequence multiplier. The concept of dynamic multiplier recognizes the fact that the overall change in income as a result of the change in investment is not instantaneous. There is a gradual process by which income change as a result of change in investment or other determinants of income. The process of change in income involves a time lag. The multiplier process works through the process of income generation and consumption expenditure. The dynamic multiplier takes into account the dynamic process of the change in income and the change in consumption at different stages due to change in investment. The dynamic multiplier is essentially a stage-by stage computation of the change in income resulting from the change in investment till the full effect of the multiplier is realized


Types of multiplier?

tree multiplier CSA (carry select adder) multiplier shift & add multiplier Higher radix multiplier


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 happens to the income multiplier if the aggregate supply curve is vertical?

the multiplier is zero.

Related questions

How is the multiplier concept computed including MPC?

100


Are the multiplier of even number always even?

In a mathematical context, a multiplier for a number, r, is be (1 + r/100) which is usually a rational fraction and the concept of odd or even does not apply to fractions.


Difference between static and dynamic multiplier?

The concept of static multiplier implies that changes in investment causes change in income instantaneously. It means that there is no time lag between the change in investment and the change in income. It implies that the moment a rupee is spent on investment project, society's income increases by a multiple. Let us explain the concept of the dynamic multiplier also known as period and sequence multiplier. The concept of dynamic multiplier recognizes the fact that the overall change in income as a result of the change in investment is not instantaneous. There is a gradual process by which income change as a result of change in investment or other determinants of income. The process of change in income involves a time lag. The multiplier process works through the process of income generation and consumption expenditure. The dynamic multiplier takes into account the dynamic process of the change in income and the change in consumption at different stages due to change in investment. The dynamic multiplier is essentially a stage-by stage computation of the change in income resulting from the change in investment till the full effect of the multiplier is realized


Types of multiplier?

tree multiplier CSA (carry select adder) multiplier shift & add multiplier Higher radix multiplier


Is a seesaw a force multiplier or a speed multiplier?

force multiplier


What is super multiplier?

super multiplier refers to interaction of the multiplier and accelerator.


Is the arm lever a distance multiplier or a force multiplier?

Well, i'd say its both. depends on the case to specify when it is a force multiplier or a distance multiplier.


Is a bottle opener a speed or force multiplier?

Force Multiplier


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.


Definition of multiplier effect in tourism?

concept of where the income spend by tourists is re-spend in another business sector related to the tourism activity that takes place


Finite population multiplier in finance management?

finite population multiplier finite population multiplier


If the tax multiplier is -2 what is the government multiplier?

3