If the tax multiplier is - 6 and taxes are reduced by $100 billion, output:

Name: If the tax multiplier is - 6 and taxes are reduced by $100 billion, output:
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Quizplus · Accepted Answer

The tax multiplier indicates the change in output resulting from a change in taxes. A tax multiplier of -6 means that for every $1 decrease in taxes, output increases by $6. Therefore, a $100 billion reduction in taxes would increase output by $600 billion.

If the Tax Multiplier Is - 6 and Taxes Are