The effect throughout the entire economy of one individual's increase in spending will be

Question

Quizplus · Accepted Answer

The effect throughout the entire economy of one individual's increase in spending will be greater than the individual's spending. This is because the increase in spending will have a "multiplier effect" as the money spent will ripple through the economy, creating income for other individuals, who will in turn spend some of it, leading to more income and spending in a cycle. This multiplier effect will cause the overall impact to be greater than the initial increase in spending.

The Effect Throughout the Entire Economy of One Individual's Increase