Retrieving "Multiplier Effect" from the archives

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1. Aggregate Demand

   Linked via "multiplier effect"

   Government Spending ($G$)
   Government spending(G) ($G$) includes all current expenditures on goods and services by the public sector, excluding transfer payments (like social security or unemployment benefits, which influence $C$ indirectly). $G$ is often treated as an exogenous variable in simple models, as it is dictated by fiscal policy decisions rather than direct market forces. Historically, changes in $G$ have been observed to have a non-linear multiplier effect,…