Investment Multiplier is measured as a

The Investment Multiplier is a measure that quantifies the impact of an initial investment on the overall economy. It represents the ratio of the change in national income to the initial change in investment. The multiplier effect occurs because when businesses invest, they create income and employment opportunities for workers, who in turn spend their income on goods and services, generating further economic activity. This cycle continues, leading to a larger increase in national income than the initial investment amount. The investment multiplier is calculated by dividing the change in national income by the initial change in investment.