The economic impact of a change in spending, working through the multiplier, takes effect

Question

Quizplus · Accepted Answer

The multiplier effect takes place over multiple rounds of spending. As the initial spending leads to more income and spending in the economy, the multiplier effect becomes stronger, resulting in a larger impact on the overall economy over time. However, the exact timing of the multiplier effect can vary depending on various factors such as the size of the initial spending, the velocity of money, and the nature of the economy.

The Economic Impact of a Change in Spending, Working Through