Can anyone explain in simple terms, the multiplier and the multiplier effect?

I have to agree with Debra - any economics course will include the Keynesian multiplier - even if merely as one of many arguments - to claim to have studied economics (which I assume was part of your finance degree) but never to have come across it is simply not feasible. Keynesian multiplier Keynesian economists often calculate multipliers that measure the effect on aggregate demand only. (To be precise, the usual Keynesian multiplier formulas measure how much the IS curve shifts left or right in response to an exogenous change in spending.) Opponents of Keynesianism have sometimes argued that Keynesian multiplier calculations are misleading; for example, according to the theory of Ricardian equivalence, it is impossible to calculate the effect of deficit-financed government spending on demand without specifying how people expect the deficit to be paid off in the future.

American Economist Paul Samuelson credits Alvin Hansen for the inspiration behind his seminal 1939 contribution. The original Samuelson multiplier-accelerator model (or, as he belatedly baptised it, the "Hansen-Samuelson" model) relies on a multiplier mechanism which is based on a simple Keynesian consumption function with a Robertsonian lag: Ct = c0 + cYt? 1 so present consumption is a function of past income (with c as the marginal propensity to consume).

Investment, in turn, is assumed to be composed of three parts: It = I0 + I(r) + b(Ct? Ct? 1) The first part is autonomous investment, the second is investment induced by interest rates and the final part is investment induced by changes in consumption demand (the "acceleration" principle).

It is assumed that 0 < be . As we are concentrating on the income-expenditure side, let us assume I(r) = 0 (or alternatively, constant interest), so that: It = I0 + b(Ct? Ct?

1) Now, assuming away government and foreign sector, aggregate demand at time t is: Ytd = Ct + It = c0 + I0 + cYt? 1 + b(Ct? Ct?

1) assuming goods market equilibrium (so Yt = Ytd), then in equilibrium: Yt = c0 + I0 + cYt? 1 + b(Ct? Ct?

1).

You are wrong. I myself do not get Food Stamps or any kind of Welfare for that matter. I just know a big percentage of those recipients are also as likely to be Republicans.

Why? Because older people tend to belong to that party. Also you have defied a basic taboo of Republicanism.

Indirectly you are insulting the American food industry, corporations. Common sense should tell you that FOOD CORPORATIONS love those stamps, and welfare in general come to think of it.

I cant really gove you an answer,but what I can give you is a way to a solution, that is you have to find the anglde that you relate to or peaks your interest. A good paper is one that people get drawn into because it reaches them ln some way.As for me WW11 to me, I think of the holocaust and the effect it had on the survivors, their families and those who stood by and did nothing until it was too late.