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Q: What are the limitations of the multiplier effect?
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Related questions

What is multiplier effect in the mining industry?

The multiplier effect, is when one job in the mining industry creates 4 new jobs in other industries


Does fiscal policy have a multiplier effect?

yes


What is a travel multiplier?

The travel multiplier measures the effect of the initial tourism spending and the chain of spending that follows.


What does multiplier effect mean?

The multiplier effect describes how an increase in some economic activity starts a chain reaction that generates more activity than the original increase. The multiplier effect demonstrates the impact that reserve requirements set by the Federal Reserve have on the U.S. money supply.


What do taxes and transfer payments act as?

Multiplier Effect


What is the multiplier effect of 1000000 of payroll on the local economy?

4568255


How do you calculate the multiplier effect?

by dividing investment with 1 subtract consumption function


When alcohol affects the action of another drug or medicine being taken it is called?

The Multiplier Effect


How would the multiplier effect work when a factory close down in a city?

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What is an example of a multiplier effect?

K= I/(1-MPC) MPC is a marginal propensity to consume I = investment


Why tax multiplier is always be smaller than govt spending multiplier?

If the full multiplier for G (i.e. ignoring crowding out effects) is = change in G/Multiplier Then the tax multiplier is = change in T x marginal propensity to consume/multiplier since the mpc is between 0 and 1 the tax multiplier is less. Intuitively it is not difficult to see why, the change tax enters spending decisions through consumption and consumption is dependant on the mpc. Whereas as G affects spending decisions directly - it is a injection into the economy that does not have to work through some indirect source to have an effect on the economy.


Types of multiplier?

tree multiplier CSA (carry select adder) multiplier shift & add multiplier Higher radix multiplier