What economic concept describes how an initial change in spending produces a larger overall change in national income or output?

Multiplier effect

The multiplier effect occurs because one person's spending becomes another person's income, which is then partially spent again, creating a ripple effect through the economy. This concept is a cornerstone of Keynesian economics, suggesting that government investment can stimulate growth far beyond the initial dollar amount spent. A simple way to remember it is that the initial spending "multiplies" as it moves from hand to hand.