Which of the following reflects the total spending effect when consumers increase spending?

The multiplier effect accurately reflects the total spending effect when consumers increase spending. This concept illustrates how an initial increase in spending by consumers leads to increased income for businesses and ultimately a greater overall impact on economic activity than the initial amount spent. When consumers spend more, businesses experience higher sales, which can prompt them to increase production, hire more workers, and invest in additional resources. This process creates a chain reaction where each round of spending continues to stimulate economic activity, with the total impact being magnified beyond the original expenditure.

The multiplier effect is a crucial concept in understanding how consumer behavior can influence macroeconomic conditions, as it highlights the interconnectedness of consumption, income, and investment in the economy. Thus, when consumers increase their spending, the overall economic expansion is greater than the initial increase in spending due to this cascading effect.