In the Keynesian model, if an increase in government spending of 40 units accompanied by an equal increase in taxes caused equilibrium income to rise by 40 units, the autonomous expenditure multiplier must be
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2 marks, −1MacroeconomicsKeynesian cross and the multiplierThe balanced budget multiplierModerateabout 1 min
JNU SIS 2015 Question 9: Keynesian cross and the multiplier
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What this question tests
This question is on The balanced budget multiplier, part of Keynesian cross and the multiplier in Macroeconomics.
Why raising spending and taxes by the same amount still raises income.
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