Multiplier Process Example: Absent Office Workers
The multiplier process can be illustrated by the economic impact of office workers' absence from a central business district due to stay-at-home orders. The initial drop in spending from these workers (e.g., on lunches and transport) leads to a chain reaction of reduced income for local businesses, causing them to cut back on their own spending and employment, thereby amplifying the initial economic shock.
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Introduction to Macroeconomics Course
Ch.3 Aggregate demand and the multiplier model - The Economy 2.0 Macroeconomics @ CORE Econ
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Multiplier Process Example: Absent Office Workers
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Learn After
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