Economists refer to the series of induced increases in consumption spending that result from an initial increase in autonomous expenditures as the ________ effect.

Question

Quizplus · Accepted Answer

The effect where an initial increase in autonomous expenditures leads to a series of induced increases in consumption spending is known as the multiplier effect in economics. It is called so because the magnitude of the increase in total spending is often larger than the initial increase in autonomous expenditures, which reflects the multiplication of the impact of the initial stimulus on the economy.

Economists Refer to the Series of Induced Increases in Consumption