multiplier effect

1. An effect in economics in which an increase in spending produces an increase in national income and consumption greater than the initial amount spent. For example, if a corporation builds a factory, it will employ construction workers and their suppliers as well as those who work in the factory. Indirectly, the new factory will stimulate employment in laundries, restaurants, and service industries in the factory's vicinity.

Example Sentences

Manufacturing remains the key to productivity growth, packs a far higher multiplier effect on local economies than retail, trade or finance and generally pays far higher wages.

From Los Angeles Times

According to Swiss investment bank UBS, the GST cuts will also have a larger "multiplier effect" than the previous corporate and income tax cuts undertaken by Modi, as they "directly affect consumption at the point of purchase, potentially leading to higher consumer spending".

From BBC

Economists say the work that undocumented immigrants do has a multiplier effect.

From Los Angeles Times

Dwindling filming is having a broader “multiplier effect” on the local economy, said Councilmember Adrin Nazarian, who represents the eastern San Fernando Valley and introduced an earlier City Council proposal to streamline the city’s film permitting process.

From Los Angeles Times

Biden’s move will have a multiplier effect.

From Slate