Why is the tax multiplier smaller than the government spending multiplier?
The tax multiplier is smaller than the government spending multiplier because government spending has a direct impact on aggregate demand, while a tax cut has only an indirect impact on aggregate demand. Consumers will save some of their income from the tax cut.
Economics
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Business cycles are officially dated by:
A) National Bureau of Economic Research, NBER. B) Bureau of Economic Analysis, BEA. C) Bureau of Labor Statistics, BLS. D) none of the above.
Economics
The precautionary demand for money is the demand for money:
a. for normal transactions purposes. b. for normal investment purposes. c. for special stock purchases. d. to protect against inflation. e. to cover unexpected events.
Economics