Trickle Down Theory
Trickle Down Theory
This is a theory that states that positive government intervention has a positive effect far greater than the direct effect. For example if the government was to give "Company A" a tax break, that company would then have more funds available to hire more people, which means it will help the unemployment rate. This also means that those people who were jobless prior to the tax break that indirectly got them a job, will start spending more money. This will trickle down the line and have a positive influence on the economy as a whole.
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