Definition of Multiplier effect:
Generally, economists are usually the most interested in how capital infusions positively affect income. Most economists believe that capital infusions of any kind, whether it be at the governmental or corporate level, will have a broad snowball effect on various aspects of economic activity.
The multiplier effect refers to the proportional amount of increase, or decrease, in final income that results from an injection, or withdrawal, of spending.
That expands or intensifies (multiplies) as an activity or occurrence is repeated.
How to use Multiplier effect in a sentence?
- The most basic multiplier used in gauging the multiplier effect is calculated as change in income / change in spending and is used by companies to asses investment efficiency.
- Sometimes the multiplier effect will give you a good baseline on how much of a product you need to produce.
- The multiplier effect refers to the proportional amount of increase, or decrease, in final income that results from an injection, or withdrawal, of spending.
- The money supply multiplier is also another variation of a standard multiplier, using a money multiplier to analyze effects on the money supply.
- The country was going through a multiplier effect and would be gaining a lot of new finances in the coming years.
- If your product keeps flying off the shelf it may time to rely on the multiplier effect and start increasing your supply.
Meaning of Multiplier effect & Multiplier effect Definition