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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

In the standard textbook Keynesian analysis, there is reason to believe that the government spending multiplier is larger than the tax multiplier. Why?

To determine

Reason for economist who believes that the government spending multiplier is larger than the tax multiplier

Explanation

The multiplier indicates the number of time income increases by increasing the government spending. As per standard Keynesian analysis, economist believes that spending the multiplier is greater than the tax multiplier. If the government spends $1, then $1 fully comes to the spending stream...

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