Simple
Multiplier = 1/MPS = 1/(1-MPC)
Complex Multiplier =
1 / (MPS + MPT + MPM);
smaller than the sumple multiplier because there are more
leakages
Multiplier with Changes in
the Price Level (with Inflation);
smaller than the simple multiplier because AS is upward
sloping
Gov't Spending
Multiplier = 1 / MPS = 1 / (1 - MPC);
we will use the simple multiplier
Lump Sum Tax
Multiplier = - MPC / MPS;
always one less than the simple multiplier and
negative
Balanced Budget
Multiplier = 1;
change G and T by the same amount in the same direction;
always equals 1
Multiplier with Crowding
Out:
smaller than the simple multiplier
Multiplier with Supply-Side
Effects:
larger than the simple multiplier
|
