Here we detail about the top three types of multipliers in economics. (a) Employment Multiplier: Employment multiplier is associated with the name of Prof. R.F. Kahn. The idea of multiplier had its origin in 1931 when Prof. Kahn was discussing the favourable effects of public investment on aggregate employment. Prof. Kahn was of the view that an initial increase in [...]
Read this article to learn about the multiplier in an underdeveloped economy. Multiplier is an important tool of analysis in Keynesian economics. It is the basis of the theory of income generation and the mechanism through which income gets propagated. Multiplier is the ratio between an initial increment in investment and the final increment in income. The higher the margin [...]
Read this article to learn about the dynamic multiplier action in net investment of an industry. In the actual world adjustment as a result of change in net investment takes time. Therefore, to get a more complete picture of the events connected with a change in net investment, we have to follow the path of movement from one equilibrium situation [...]