There are several things that can cause a ripple effect in our economy. There are economic facts, or things that will happen no matter what, that start to affect more and more people, until they sooner or later effect everybody. The Keynesian Transmission Mechanism is a good example of something that has a ripple effect on everybody. The Keynesian mechanism has three stages, each of which has an effect on something. The first stage is …
showed first 75 words of 906 total

showed last 75 words of 906 total
…Be it increasing the job market, or making it easier to buy a house, the mechanism has its effects on everybody. Even when the Keynesian Transmission Mechanism gets blocked, there are still ripple affects the effect people. There could be an increase in the money supply, which would cause people to spend more, even though the interest rate stays the same. Unemployment can even be changed due to the raise or drop in money supply.