multiplier effect---(econ) For a one unit change in one variable, a dependent variable will be increased by M units. M is the multiplier. In the area of government spending (see fiscal policy), a one dollar injection will bring in M dollars of “income”. In reverse, a one dollar cut in spending will cause M dollars of “income loss”. A loss in income for someone somewhere could mean a loss in income for many other people down the line, especially those closest to home, a domino effect as it were---a slowdown of transactions on the necessary physical goods. There are also other multipliers in economics (see monetary policy). Monetary policy help in reviving an economy unless there is a liquidity trap; velocity of money from hand to hand simmers down: fiscal policy that helps most of the mates onboard is indicated here, now also.
Many thanks to Wikipedia for help and it is much appreciated: http://en.wikipedia.org/wiki/Multiplier_(economics) 14/04/02