It’s the concept that government spending actually leads to more consumer spending. To calculate the total economic growth of a government spending package, you add in a multiplier (aka a markiplier) to the total expense to get the total economic growth.
The govt spends 1 mil, 500k of that goes to consumers who spend it again, then 250k of that is spent again, etc. The total growth is 2 mil. This kind of logic is used to justify government spending packages.
It’s the concept that government spending actually leads to more consumer spending. To calculate the total economic growth of a government spending package, you add in a multiplier (aka a markiplier) to the total expense to get the total economic growth.
The govt spends 1 mil, 500k of that goes to consumers who spend it again, then 250k of that is spent again, etc. The total growth is 2 mil. This kind of logic is used to justify government spending packages.