The multiplier effect magnifies economic changes from "summary" of The Economics Book by DK
The multiplier effect is a powerful concept in economics that demonstrates how a change in spending can have a much larger impact on the overall economy. When an initial injection of spending occurs, it sets off a chain reaction of increased spending throughout the economy. This increased spending leads to an increase in income for businesses and individuals, which in turn leads to even more spending. As businesses see an increase in demand for their products or services, they may choose to hire more workers or invest in new equipment. This leads to more people being employed and earning income, which further stimulates spending in the economy. The cycle continues as each round of spending leads to mor...
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