The multiplier effect is best described as:
A)the increase in final income arising from any new injection of spending
B)the increase in the expenditure of a country
C)the increase in the public debt of a country
D)the increase in investment of a country

Question

Quizplus · Accepted Answer

The multiplier effect refers to the phenomenon where an initial increase in spending (an injection) leads to a larger increase in national income. This happens because the initial spending generates income for others, who then spend a portion of that income, and so on, leading to a cumulative effect that is greater than the initial spending.

The Multiplier Effect Is Best Described As