The presence of income taxes and imports cause the multiplier to

Name: The presence of income taxes and imports cause the multiplier to
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Question

Quizplus · Accepted Answer

Income taxes and imports both decrease the overall amount of money available to be spent in the economy, which reduces the value of the multiplier. However, the multiplier remains positive because there is still some increase in spending with each new injection of money into the economy. Therefore, the value of the multiplier falls but remains positive.

The Presence of Income Taxes and Imports Cause the Multiplier