Multiplier
A multiplier is a number that is used to increase the value of a given number. It is used in a variety of fields, including economics, finance, and mathematics. In economics, a multiplier is used to measure the effect of an increase or decrease in spending on the overall economy. In finance, a multiplier is used to calculate the return on investment (ROI) of a given investment. In mathematics, a multiplier is used to calculate the product of two or more numbers.
History of the Term
The concept of a multiplier has been around since the early days of economics. In the late 19th century, economist Alfred Marshall developed the concept of a multiplier to measure the effect of an increase or decrease in spending on the overall economy. Marshall’s multiplier was based on the idea that an increase in spending would lead to an increase in production, which would then lead to an increase in employment and wages, which would then lead to an increase in spending, and so on. This concept was later refined by economist John Maynard Keynes, who developed the concept of the multiplier effect.
Table of Comparisons
| Investment | Multiplier |
|---|---|
| $100 | 2x |
| $500 | 3x |
| $1000 | 4x |
Summary
A multiplier is a number that is used to increase the value of a given number. It is used in a variety of fields, including economics, finance, and mathematics. The concept of a multiplier has been around since the early days of economics and was developed by economists Alfred Marshall and John Maynard Keynes. A multiplier is used to measure the effect of an increase or decrease in spending on the overall economy, to calculate the return on investment (ROI) of a given investment, and to calculate the product of two or more numbers. For more information about multipliers, you can visit websites such as Investopedia, The Balance, and Khan Academy.
See Also
- Interest Rate
- Gross Domestic Product (GDP)
- Inflation
- Debt
- Savings
- Investment
- Consumption
- Taxes
- Exports
- Imports
