Chapter 10 and 13 REVIEW:
MULTIPLIER |
PAGE |
LARGER OR SMALLER THAN |
SIMPLE |
pp. 201-203 "The Multiplier Effect" |
multiplier = 1 / mps |
Complex multiplier |
pp. 203-205 |
smaller because there are more leakages: (1) saving, (2) spending on imports, and (3) taxes |
Multiplier w/ changes |
p. 255-256 "Increased Government Spending" |
smaller |
G spending multiplier |
p. 255 "Increased Government Spending" |
same as simple |
Tax multiplier |
p. 25 "Tax Reductions" |
one less than the simple multiplier, but negative tax multiplier =MPC / MPS |
Bal. Budget multiplier |
p. 256, 258 "Combined Gov/t Spending . . . " |
always equals 1, WHY? |
Multiplier w/ crowding out |
pp. 265, 269 "Crowding-Out Effect" |
smaller |
Multiplier with supply-side effects |
pp. 265-266 "Current Thinking on Fiscal Policy" |
larger |