A small town is likely to have a smaller multiplier effect because

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A small town is likely to have a smaller multiplier effect because a larger portion of the expenditure leaks out to surrounding towns. In a smaller town, there may be fewer businesses and industries available to support the local economy, and residents may have to travel to larger cities to access certain goods and services. As a result, more money is spent outside of the town, leading to a smaller multiplier effect. While B, C, and D may also be factors that contribute to a smaller multiplier effect in a small town, A is the most significant reason.

A Small Town Is Likely to Have a Smaller Multiplier