Multipliers (definition)

In macroeconomics, the proportionate increase in national income (in the form of consumption of final goods and services), that occurs from each unit increase in new spending from some 'autonomous' source such as private investment, the government, or the outside world (through exports). The sum total of all additional consumption induced by the initial spending generally exceeds the amount of the initial spending itself. The quantitative measure of this additional consumption relative to the initial increase in investment spending is the multiplier. Many variants of the basic multiplier can be calculated.

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