Added spending causing income to grow by a larger amount is called the multiplier effect.

Question

Quizplus · Accepted Answer

When an initial increase in spending leads to further rounds of spending and income gains, it is known as the multiplier effect. This effect arises because increased income leads to increased spending, which in turn leads to further income gains, and so on. As a result, the total increase in income is larger than the initial increase in spending.

Added Spending Causing Income to Grow by a Larger Amount