Multiplier

Multiplier

The investment multiplier which quantifies the overall effects of investment spending on total income. The deposit multiplier which shows the effects of a change in bank deposits on the total amount of outstanding credit and the money supply.

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multiplier

See American currency quotation.

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Multiplier

1. The expression of a currency in terms of one U.S. dollar. For example, if a pound is worth $2.05 on a given day, it has a multiplier of 2.05. This is also called an American currency quotation. See also: Currency pair

2. In Keynesian economics, the change in income (such as GDP or GNP) that results from a capital injection. For example, if a government spends a certain amount of money building a bridge, it must hire and pay workers to do so. These workers in turn spend their earnings on other goods and services, which fuels economic growth. The multiplier measures how much each dollar the government spends increases economic growth. See also: Demand-side economics.