Smaller multiplier means that change in government, Ask an Expert

Economics

Q. Most macroeconomists believe it is a good thing that taxes act as automatic stabilizers and lower size of multiplier. However, a smaller multiplier means that change in government purchases of goods and services, government transfers, or taxes necessary to close an inflationary or recessionary gap is larger. How can you explain this apparent inconsistency?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9294940

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