Question

How to derive algebraically the goverment purchases multiplier and the tax multiplier?

How to derive algebraically the goverment purchases multiplier and the tax multiplier?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What is and How do you find the Government-Purchases Multiplier? What is and How do You...
What is and How do you find the Government-Purchases Multiplier? What is and How do You find the Balanced-Budget Government-Purchases Multiplier? What is and how do you find the Tax Multiplier? Explain why G and T have different multipliers.
Many policmakers worry that increased goverment purchases are not expansionary because they crowd out private investment...
Many policmakers worry that increased goverment purchases are not expansionary because they crowd out private investment spending. Explain the logic of this argument.
For a simple model of the expenditure sector without any government involvement, derive the multiplier in...
For a simple model of the expenditure sector without any government involvement, derive the multiplier in terms of the marginal propensity to save (s) rather than the marginal propensity to consume (c). does this formula still hold when the government enters the picture and levies an income tax?
suppose that banks use x fraction of their deposits to buy treasuries. Derive the money multiplier...
suppose that banks use x fraction of their deposits to buy treasuries. Derive the money multiplier as a function of x, currency-deposit ratio cdr, and actual reserve ratio ar. How does an increase in x affect money multiplier, monetary base, and money supply?
Why is the multiplier for spending changes greater than the multiplier for tax changes? What are...
Why is the multiplier for spending changes greater than the multiplier for tax changes? What are the arguments that suggest the expenditure multiplier might be lower than the tax multiplier?
how would an increase in the income tax affect the Keynesian government expenditure multiplier?
how would an increase in the income tax affect the Keynesian government expenditure multiplier?
Understanding how to solve an equation Algebraically and graphically.
Understanding how to solve an equation Algebraically and graphically.
If the government spending multiplier is equal to 5, then the tax multiplier (change in GDP...
If the government spending multiplier is equal to 5, then the tax multiplier (change in GDP divided by the change in taxes) is equal to a. -2.5 b. -4 c. -5 d. -6
1. Suppose that the government purchases multiplier equals 2. Real GDP is $14 trillion and potential...
1. Suppose that the government purchases multiplier equals 2. Real GDP is $14 trillion and potential real GDP is $14.5 trillion. Is there a recessionary output gap or a contractionary output gap? 2. In order to close this output gap, the government purchases would need to_____: incease, decrease, stay the same? 3. and lastly, calculate by how much exactly government purchases have to increase (or decrease) A                                                                                                                           
What is the fiscal multiplier? What determines the size of the multiplier? How does the multiplier...
What is the fiscal multiplier? What determines the size of the multiplier? How does the multiplier differ between closed and open economies?