Easy to understand:
Your lower control arm is attached on one end to the frame (fixed, but allows movement), and the steering knuckle/hub is attached at the other end of the lower control arm.
The spacer is placed below where the strut assembly mounts to the lower control arm.
If the strut was mounted at the steering knuckle, a 1" spacer would move the lower control arm down 1", as it's at the end of the "lever"; this is a 1:1 ratio.
If the strut is mounted halfway between the frame and knuckle/hub, then the 1" spacer will move the end of the lever down 2"; a 2:1 ratio.
Here's a picture of a random lower control arm, for instructional purposes. See the two mounting holes roughly in the middle? That's where the strut attaches to, so if you add length to the strut, it will push down on the lower control arm, giving you a lift.
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