Multiplier effect

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Revision as of 06:17, 19 September 2008 by imported>Sylvain Catherine (see spending multiplier)
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In economics, the multiplier effect refers to the fact that an increase of an economic aggregate may lead to an increase of this aggregate or another greater than the initial raise. See Spending multiplier.

The multiplier effect is also known by bankers. An initial mortgage creates a deposit on a client account. This deposit can be partially lent to another client and so on.