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You might be referring to the multiplier effect in economics.

When a new factory is built people will be hired to staff it. People will also be hired to transport raw materials to the factory and to take away finished products. All of these people will be paid for their work. They might save some of their money, they will spend most of it. Any money that they save becomes available for loans that could be used to build other factories that will employ other people. So the money invested in the first factory will have been multiplied in the form of another factory, or at least part of another one. Meanwhile, the money that the new employees spend will go to other people. These people will save some and spend the rest. No new money has been created by this spending by it is as if the money has been multiplied because more people have been able to use it. This is the multiplier effect.

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Related Questions

How would the multiplier effect work when a factory close down in a city?

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nothing a factory is a factory nothing will happen unless something bad happens or it is not built properly, otherwise nothing is wrong with it :) glad i could help.


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