The idea of the spending multiplier is that:
A) one person's spending becomes another person's income, which stimulates more spending.
B) people spend money on some items, such as food and toiletries, multiple times.
C) people tend to spend a greater amount in stores than they originally intended.
D) when a person saves money in a bank, the bank lends it out to another person to be spent.

Question

Quizplus · Accepted Answer

The spending multiplier concept is based on the idea that an initial increase in spending leads to increased income for others, which in turn leads to further spending and income generation, creating a multiplied effect on the overall economy.

The Idea of the Spending Multiplier Is That