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 (a multiple)in stores than they originally intend.
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 one person's spending becomes another person's income, which then leads to more spending and generates further income. This cycle reinforces economic growth and is used to estimate the overall impact of government spending and tax policies on the economy.

The Idea of the Spending Multiplier Is That