There was a spike in the sales of the new iPhone. This resulted in an even larger increase in demand for the machinery and equipment needed to manufacture the iPhones. What is this a result of?

Question

Quizplus · Accepted Answer

The multiplier effect explains how an increase in one economic activity (like the sales of a new iPhone) leads to a larger increase in other economic activities (such as the demand for machinery and equipment needed to manufacture the iPhones). This effect demonstrates how initial increases in spending lead to further increases in economic activity and demand.

There Was a Spike in the Sales of the New