The multiplier effect occurs when:

A. spending by one person generates income for others and causes others to spend more too, increasing the impact of the initial spending on the economy.
B. the level of consumer confidence increases more than predicted given a tax cut.
C. increased spending by one or more individuals causes others to react and increase their savings.
D. None of these is true.

A. spending by one person generates income for others and causes others to spend more too, increasing the impact of the initial spending on the economy.