Which of the following is true about government spending (G) and tax (T) multiplier? The G multiplier is bigger in absolute value than the T multiplier.
Which of the following is true about government spending (G) and tax (T) multiplier? The G multiplier is bigger in absolute value than the T multiplier.
Chapter9: The Keynesian Model In Action
Section: Chapter Questions
Problem 7SQP
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Which of the following is true about government spending (G) and tax (T) multiplier?
- The G multiplier is bigger in absolute value than the T multiplier.
- The T multiplier is bigger in absolute value than the T multiplier.
- G and T multipliers are always the same size.
- Whether the G multiplier is larger/smaller than the T multiplier depends on the size of MPC.
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