The balanced budget multiplier is
A) positive because the magnitude of government expenditure multiplier is smaller than the magnitude of tax multiplier.
B) positive because the magnitude of government expenditure multiplier is larger than the magnitude of tax multiplier.
C) equal to zero.
D) negative because the magnitude of the tax multiplier is larger than the magnitude of the government expenditure multiplier.
E) negative because the magnitude of government expenditure multiplier is larger than the magnitude of the tax multiplier.
Correct Answer:
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A)increases;
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