What is the multiplier effect?

What will be an ideal response?

If the government spends money to build a bridge, there must be engineers, construction workers, and many others hired to do the work. This new work increases the wages of these workers. These newly hired workers then go out and spend their wages in the community, thereby creating new jobs. This is the multiplier effect.

Economics

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Van, whose utility of wealth curve is shown in the above figure, owns a home that is valued at $100,000. There is a 10 percent chance that the house will be destroyed by hurricane. The value of insurance to Van is

A) $10,000. B) $15,000. C) $20,000. D) $30,000.

Economics

Temporary tax cuts would cause

A) the AA-curve to shift left. B) the AA-curve to shift right. C) the DD-curve to shift left. D) the DD-curve to shift right. E) a shift in the AA-curve, although the direction is ambiguous.

Economics