Question

Describe in detail the concept of Investment Multiplier.

Answer 1

Answer:

What Is the Investment Multiplier?

The term investment multiplier refers to the concept that any increase in public or private investment spending has a more than proportionate positive impact on aggregate income and the general economy. It is rooted in the economic theories of John Maynard Keynes.

The multiplier attempted to quantify the additional effects of investment spending beyond those immediately measurable. The larger an investment’s multiplier, the more efficient it is in creating and distributing wealth throughout the economy.

Answer 2

The term investment multiplier refers to the conceptthat any increase in public or private investment spending has a more than proportionate positive impact on aggregate income and the general economy.