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Frank and Ernest

Published 2005-08-28 (Image 11437)

Hey, Frank, look at this!  Money multiplies as its spent again and again moving from person to person.  Economics:  The Multiplier Effect.  When money is injected into a local economy, income and consumption rise by an amount greater than that initially injected because the money circulates multiple times.  With each transfer of money there are "leakages", savings and taxes, for example.  The higher the level of leakages, the lower the value of the multiplier will be.  Big deal!  I spend my paycheck several times over all by myself! ... And thats before I even get it!

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