The magnitude of the tax multiplier is smaller than the magnitude of the government expenditure multiplier because
A) a decrease in government expenditure decreases tax revenue.
B) an increase in taxes decreases expenditures.
C) a change in taxes creates additional induced taxes.
D) a change in taxes does not change expenditures.
E) a change in taxes does not change expenditures by as much as the same size change in government expenditure.
Correct Answer:
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