economic multipliers

An economic multiplier measures how a change in one part of the economy—like government spending, investment, or consumer activity—can lead to a larger overall impact on economic output. For example, when a government funds a new project, it creates jobs and income for workers. These workers then spend their earnings, supporting other businesses and jobs. The multiplier captures this ripple effect, showing how initial spending can generate a bigger increase in total economic activity. Essentially, it reflects how interconnected spending boosts overall growth beyond the original investment.