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.
That,” she says, “is the multiplier effect of investing in women.
And, that increased spending will have a multiplier effect increasing spending even further.
Hence, a dollar of government spending would produce more than a dollar of new output because of the “multiplier effect.”