Question

what do you mean by forward action and backward action?​

Answer 1

Answer: Multiplier is a double-edged weapon. It works in the backward direction as much as in the forward direction. The process of income propagation through multiplier does not work in the forward direction only. ... The higher the MPC, the greater the value of the multiplier and the greater the cumulative decline in income. In economics, a multiplier broadly refers to an economic factor that, when increased or changed, causes increases or changes in many other related economic variables. In terms of gross domestic product, the multiplier effect causes gains in total output to be greater than the change in spending that caused it.