0
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.
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What are the sources of information?
Documentary Sources- books, journals,magazines of any format Institutional Sources- school /colleges, govt. offices, NGOs Human sources- Govt. official, elite group,religious/holy priest Virtual sources- web sources
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