The Government's Multiplyer Effect on Output

The money that the government pays to households moves through the economy. An initial spend of one dollar has a multiplied effect on total output. All of this is related to the interdependence principle, where one persons spending is another person's income. A new road builder will spend money on lunch, which is income for people who run restaurants. And these restaurant owners will in turn buy things too, and so on and on it goes. The government's initial spinning ripples through the economy - essentially the multiplier effect.