As the government builds new schools, the construction workers and material vendors employed on the project spend more in the community where they work. What is the economic term for this effect?

Question

Quizplus · Accepted Answer

The economic term for this effect is the multiplier effect. This is because the initial investment of building new schools creates a ripple effect in the economy, as the construction workers and material vendors spend their income in the local community, which then supports other businesses and creates additional economic activity. The multiplier effect refers to the idea that one initial economic change can create a larger impact on the economy overall.

As the Government Builds New Schools, the Construction Workers and Material