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MULTIPLIER IMPACT It is a well recognized fact that money spent in an area usually generates more income than the initial expenditure itself. Economists have called this multiplication factor the multiplier. The multiplier indicates the relationship between some observed direct change in the economy and the amount of economic activity that this change creates throughout the economy. It's the ratio of all ~total) effect, direct plus indirect, ta the direct effects. The size af the multiplier is a function af how dependent the area is on other regions for its goods and services. The more . , ~ dependent the regian, the more maney (or income) "leaks" out of the area to pay for the goods and services produced outside the area and the smaller the multiplier. Conversely, the more ~dependent the region, the fewer goods need to be imported and thus less money ,~ "leaks" out to pay for these goods and the multiplier is larger. The magnitude of a multiplier is influenced by the degree of development in the area under consideration. The more eco- nomically developed the area is, the larger the multiplier. The more complex the economy, the less resident consumers spend outside the area. Businesses are able to interact and thus cut down first and successive rounds of business imports.4 ',,: ., A concept that is close to the multiplier is the idea that a dollar circulates many times in an area generating more benefits than those just associated with the initial expenditure. This idea is usually stated in terms of 5-8 times being the "average" number , I of times a dollar "turns over" in an area. A problem with this concept is that each time the dollar turns over some of it "leaks" out of the region and thus the full dollar impact is not really there. Also, empirical evidence on the concept's value is lacking. Thus, the true multipliilr concept is much preferable to the turn-over 7