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1.3 Multiplier formula in an ... and m is the ratio of imports to GDP. ... precise formulation" of interdependent systems in economics and the origin of multiplier ...
In monetary economics, the money multiplier is the ratio of ... The following formula for the money multiplier may be used, explicitly accounting for the fact that ...
Not all multiples are based on earnings or cash flow drivers. The price-to-book ratio (P/B) is a commonly used benchmark comparing market value to the accounting book value of the firm's assets. The price/sales ratio and EV/sales ratios measure value relative to sales. These multiples must be used with caution as both sales and book values are ...
In some economics textbooks, the supply-demand equilibrium in the markets for money and reserves is represented by a simple so-called money multiplier relationship between the monetary base of the central bank and the resulting money supply including commercial bank deposits. This is a short-hand simplification which disregards several other ...
Multiplier (economics), any measure of the proportional effect of an exogenous variable on an endogenous variable; Fiscal multiplier, the ratio of the change in aggregate demand to the change in government spending that caused it
In economics, the fiscal multiplier (not to be confused with the money multiplier) is the ratio of change in national income arising from a change in government spending.
Chapter 10 introduces the famous 'multiplier' through an example: if the marginal propensity to consume is 90%, then 'the multiplier k is 10; and the total employment caused by (e.g.) increased public works will be ten times the employment caused by the public works themselves' (pp. 116f). Formally Keynes writes the multiplier as k=1/S'(Y).
The MPS plays a central role in Keynesian economics as it quantifies the saving-income relation, which is the flip side of the consumption-income relation, and according to Keynes it reflects the fundamental psychological law. The marginal propensity to save is also a key variable in determining the value of the multiplier.