3 ms·
Check out multipliers: http://en.wikipedia.org/wiki/Multiplier_(economics) http://en.wikipedia.org/wiki/Multiplier_(economics)
by seiji 16y ago
Check out multipliers: http://en.wikipedia.org/wiki/Multiplier_(economics) http://en.wikipedia.org/wiki/Multiplier_(economics)
- Schultzy 16y agoI agree with lucas, but more because of the faulty Keynesian economics described in that article. Innovation and productive activity "generates" money, not consumption. It doesn't make any sense to say that if I purchase something off of the McDonald's Dollar Menu, I have somehow generated and additional $2.08.
- seiji 16y agoShaffer's rounds of spending chapter explains it better than the wikipedia article: http://www.rri.wvu.edu/WebBook/Schaffer/chap05.html http://www.rri.wvu.edu/WebBook/Schaffer/chap05.html (not sure why I jumped to wikipedia first).