Multiplier Effect


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Multiplier Effect

A measure of the change in a country's money supply that occurs as the result of banks' ability to lend. The multiplier effect is dependent on banks' required reserves, or the amount of money in deposits they are legally required to keep in-house. If a bank has a low reserve requirement, it is able to lend more of its deposit money, which in turn increases the money supply. This indicates a high multiplier effect. On the other hand, a high reserve requirement leads to a low multiplier effect. See also: M1, M2.
References in periodicals archive ?
This growth would result in direct economic contribution, multiplier effect on output and job-creation along with an induced effect on tourism.
Through this investment, we hope to expand our local business operations significantly, in a way that we believe will lead to a multiplier effect on the economy, said GE vice chairman John Rice.
The combination will have a big multiplier effect and unlock substantial shareholder value.
Awori said, 'Given that this sector contributes about half of the country's gross domestic product and are now providing 80 percent of new jobs, there is a significant multiplier effect on our economy if they are funded adequately.
The earlier this expense is incurred in the development/ construction phase, the more likely the cost component in question incurs a multiplier effect.
He said, "The fund can be turned around four times a year and because of the multiplier effect it could equate to a N$80 million facility per year.
Topics include absolute income hypothesis, business cycle theory, demand management, inflation, multiplier effect, Say's Law, Ricardo Effect and more.
When taxpayers have both ordinary and preferential income, additional deductions can create a multiplier effect that enables them to save at higher rates than their marginal rates on ordinary income.
Real Time Intent-Driven Personalization Powers Revenue Multiplier Effect and Increases ROI on Existing Marketing Investments for Online Retailer
Certainly there's a multiplier effect in the sales dollars they spend,'' he said.
The Congress' support for public works is grounded on a recognition of the tremendous economic multiplier effect that capital programs have.
The multiplier effect occurs because one retiree's spending becomes another person's income," she said.