Multiplier Model in macro economics

This document discusses the concept of the multiplier effect in economics. It provides background on how the multiplier was originally developed by F.A. Kahn and later refined by Keynes. It then defines Kahn's employment multiplier and Keynes' investment/income multiplier. The document goes on to provide the formula for calculating the multiplier and discusses how it is affected by the marginal propensity to consume. It also provides an example of how the multiplier effect causes total income to increase through successive rounds of spending.