ECONOMICS
ECONOMIC DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the ratio is generally 1:2 with regard to jobs created
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it is directly correlated to spatial fix
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more non-basic jobs are created as a result
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banks’ lending supply and ability is tied to it
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Detailed explanation-1: -The multiplier effect refers to the effect on national income and product of an exogenous increase in demand. For example, suppose that investment demand increases by one. Firms then produce to meet this demand. That the national product has increased means that the national income has increased.
Detailed explanation-2: -The multiplier effect arises because one agent’s spending is another agent’s income. When a spending project creates new jobs for example, this creates extra injections of income and demand into a country’s circular flow.
Detailed explanation-3: -We can ignore the information on the average propensity to consume as this is irrelevant to the multiplier calculation.
Detailed explanation-4: -The different types of multipliers in economics are the Fiscal multiplier, Keynesian multiplier, Employment multiplier, Consumption multiplier etc.