Trickle-up effect
Okay kiddo, so you know how sometimes when you pour water on something, it doesn't all stay in one place and instead spreads out and goes down to the ground? The trickle-up effect is kind of like that, but instead of water, we're talking about money.
So when rich people have a lot of money, they might spend some of it on things like fancy cars or expensive vacations. When they spend their money like that, the people who make those cars or work at those vacation spots get paid for their work.
Then those workers might use the money they earned to buy things they need or want, like groceries or clothes. And the people who sell those things get paid too.
This cycle keeps going and going, with more and more people making money and spending it on things they need or want. So even though the rich people started it by spending their money, everyone else benefits from this trickle-up effect.
It's called the trickle-up effect because the money starts at the top with the rich people and then "trickles" down to everyone else. Does that make sense, kiddo?
So when rich people have a lot of money, they might spend some of it on things like fancy cars or expensive vacations. When they spend their money like that, the people who make those cars or work at those vacation spots get paid for their work.
Then those workers might use the money they earned to buy things they need or want, like groceries or clothes. And the people who sell those things get paid too.
This cycle keeps going and going, with more and more people making money and spending it on things they need or want. So even though the rich people started it by spending their money, everyone else benefits from this trickle-up effect.
It's called the trickle-up effect because the money starts at the top with the rich people and then "trickles" down to everyone else. Does that make sense, kiddo?