Creating economic multiplier effects


  • Building forward and backward economic linkages

Description

National economic multiplier effects are defined as the ratio of the change in national income to the initial change in the sectoral investment. Thus, an initial investment of $1,000 may cause an increase in the national economy of $2,500 -- in which case the multiplier would be 2.5. Income multipliers would be how much income is created per unit of expenditure on income generation, and so on.


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