In Economics, What Is a Multiplier?

Multiplier is a term of macroeconomics, which refers to the change of variables (such as GDP or money supply) caused by changes in exogenous variables (such as government expenditure or bank reserves) per unit. Multiplier is a basic feature of a simple income-expenditure model. The fiscal multiplier is a collective term for the three multipliers of government expenditure multiplier, tax multiplier, and balanced budget multiplier. Multiplier is the ratio between the amount of change in GDP and the amount of initial injection that caused this change. The scale of GDP increase or decrease depends on the size of the multiplier, which is determined by the marginal propensity to consume, or the inverse of the marginal propensity to save. In the formula, m represents the money multiplier, M, represents the change amount of the base currency, and M represents the change amount of the money supply.

[chéng shù]

The ratio of the change in national income to the initial injection that caused it. Expressed as k = y / J, where Y is

The amount of change in GDP and the

The amount of change in GDP and the

Government transfer payment multiplier refers to changes in income and

The amount of change in GDP

Economics studies use multipliers as a means of macroeconomic control. E.g,

Western economics multiplier refers to the multiple of the increase in gross domestic product caused by an increase in self-issued gross expenditure, or the ratio between the increase in gross domestic product and the increase in spontaneous gross expenditure that caused this increase.