A town's economy is heavily reliant on a single large manufacturing plant. The plant suddenly closes, and a large portion of the town's residents lose their jobs. As a result, these newly unemployed individuals significantly cut back on their spending at local shops and restaurants. Based on the direct consequences of this spending reduction, what is the most likely secondary effect on the town's economy?

Economic Impact of an Agricultural Shock

A regional government abruptly cancels a large public works project, causing all construction workers on the project to be laid off. Arrange the following events to show the most likely sequence in which this initial income shock spreads through the local economy.

Comparing Economic Shock Propagation