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Definition

Multiplier

Multiplier is an initial stimulus to spending (in the form of new business, consumer, or government purchases) usually results in a larger final increase in total spending, production, and employment in the economy. This magnifying effect is called the multiplier. The strength of the multiplier depends on many factors, including the type of initial spending, the importance of imports in spending, and the amount of unused capacity that initially existed in the economy.

Webster Dictionary Meaning

1. Multiplier
- One who, or that which, multiplies or increases number.
- The number by which another number is multiplied. See the Note under Multiplication.
- An instrument for multiplying or increasing by repetition or accumulation the intensity of a force or action, as heat or electricity. It is particularly used to render such a force or action appreciable or measurable when feeble. See Thermomultiplier.
Category: Economics
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