What is the multiplier effect how would it work when a new factory is built?
You might be referring to the multiplier effect in
economics.
When a new factory is built people will be hired to staff it.
People will also be hired to transport raw materials to the factory
and to take away finished products. All of these people will be
paid for their work. They might save some of their money, they will
spend most of it. Any money that they save becomes available for
loans that could be used to build other factories that will employ
other people. So the money invested in the first factory will have
been multiplied in the form of another factory, or at least part of
another one. Meanwhile, the money that the new employees spend will
go to other people. These people will save some and spend the rest.
No new money has been created by this spending by it is as if the
money has been multiplied because more people have been able to use
it. This is the multiplier effect.