Quite simply, no. The Spending multiplier, even on government spending, will always have a value of greater than one. It really is self-evident; for that money to be subjected to a multiplier, it must be circulating multiple times, therefore the first circulation (the initial spending) would result in a multiplier of one, and subsequent spends would increase the multiplier further
CT/5 /number of turns=multiplier
(final value minus original value) divided by the original value, then multiply by 100
force
The multiplier. The multiplicand is multiplied by the multiplier to create the product.
BALANCED-BUDGET MULTIPLIER:A measure of the change in aggregate production caused by equal changes in government purchases and taxes. The balanced-budget multiplier is equal to one, meaning that the multiplier effect of a change in taxes offsets all but the initial production triggered by the change in government purchases. This multiplier is the combination of the expenditures multiplier, which measures the change in aggregate production caused by changes in an autonomous aggregate expenditure, and the tax multiplier which measures the change in aggregate production caused by changes in taxes.
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1. Net purchases +? = cost of goods purchased 2. Net purchases = ? + ? = purchases
1. Net purchases +? = cost of goods purchased 2. Net purchases = ? + ? = purchases
tax multiplier is negative because when government imposes tax, the income decreases
you could do it two ways .If you have the MPC could divide it
solution in finding the purchases
by dividing investment with 1 subtract consumption function
Quite simply, no. The Spending multiplier, even on government spending, will always have a value of greater than one. It really is self-evident; for that money to be subjected to a multiplier, it must be circulating multiple times, therefore the first circulation (the initial spending) would result in a multiplier of one, and subsequent spends would increase the multiplier further
CT/5 /number of turns=multiplier
ask yourself that question.