An increase in investment spending will be multiplied into a larger increase in GDP illustrates the concept of

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The concept of how an increase in investment spending can lead to a larger increase in GDP is known as the multiplier effect. As investment spending increases, it leads to increased demand for goods and services, which in turn generates more income and spending, leading to even further increases in GDP. This multiplier effect is a key concept in macroeconomic policy discussions and is the reason why government stimulus spending is often aimed at increasing investment spending as a means of boosting the economy.

An Increase in Investment Spending Will Be Multiplied into a Larger