Flashcard Definition
A secondary effect is an additional impact of economic activity that is the ‘indirect outcome’ of an action.
Block Type
Flashcard
Where might there be examples of the secondary effect in government spending?
Consider the impact of the government investing significant spending on constructing new schools in Scotland. We may expect that significant investment will improve the quality of educational facilities and perhaps boost educational quality, this is the primary effect. However, this investment and construction is likely to create a number of jobs in the construction industry bringing positive effects. We refer to this as the secondary effect.