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 ?
The airline's economic contribution to the air transport sector is seen to percolate to the economy at large through various multiplier effects.
to increase the foreign investment in housing sector which creates forward and backward linkage with other sectors and spurs the growth through multiplier effects.
It impacts positively on jobs and it has multiplier effects with enhanced benefits for different sectors in an economy.
James into Pillar and for the multiplier effects it will have on the broader Guggenheim commercial real estate platform.
While multiplier effects for solar and wind energy were lower during operation, their contribution during the construction phase also reached as high as 3.
Guwahati, Oct 1 (ANI): Union Agriculture Minister Sharad Pawar on Friday said there are sufficient funds available for the development of agriculture in the north east region of the country, and emphasised on the need to absorb these funds, and more importantly, leverage them for multiplier effects to address the challenge.
The study, entitled "Beyond Units: Economic Benefits of the Federal Home Loan Bank of Atlanta's Affordable Housing Program," analyzed how the Bank's funding of housing development projects results in broader multiplier effects in state and local economies.
Specifically it is suggested that students may benefit from conceptualizing any short-run equilibrium level of GDP as the sum of all individual (demand-side) multiplier effects at work in the economy at a given point in time.
Iftikhar Ali Malik, Vice President SAARC CCI said that allowing of trade through Wahga-border and increase in the importable items from India will help promoting Pakistan trade with the largest Market of the region and eventually have multiple impacts in terms of saving of huge foreign exchange of the country Tariq Sayeed urged upon the need for promoting intra-regional investment stating that since these days investment had taken over trade strategy due to its multiplier effects like innovation in technology, value addition, and surplus production for quantum leap in exports etc.
It has one of the highest multiplier effects within Ontario, bringing in 22,500 direct jobs and 75,000 indirect jobs with an average salary of $59,500 per year.
In deconstruction, this incentive means more labor is able to be expended on recovery, reuse and recycling, which in turn means more materials diverted from landfill, more income taxes paid, more dollars spent in the local economy (from higher labor costs paid by the owner upfront) and further economic activity in the community through multiplier effects.
The answer, the researchers say, is not to engage in false economies by saving dollars in the short run through ignoring or cutting programs to help families, but to invest more in effective prevention and treatment programs, particularly in early intervention programs, which lower the overall costs of child abuse and provide "the greatest chance" for a "reduction of the multiplier effects consequent to abuse.