Question

The Covid virus has especially hit the casino industry in Nevada. Show you understand the autonomous spending multiplier concept by explaining why a negative shock to a core industry in any state or locality will tend to be multiplied, so the ultimate negative effect is much greater than the initial shock.

Answer 1

For example if the Casinos are not workign in the Nevada then all the related activies in the market, it will stop the income of the hotels nearby, the restaurants will go empty, the beverages and food industry will suffer, the salary of the people who work in the industry will be affected, they will not be able to make a demand for the goods that they generally need.

All this will together form a large economic crisis, so its not just the casinos are not working all the realted that support the casino and industries that are supported due to casion all will suffer. this is considered as multiplier in the market.