The multiplier that arises from equal increases in government spending and taxes is called the

Question

Quizplus · Accepted Answer

The balanced budget multiplier arises when government spending increases and taxes increase proportionally to balance the budget. This results in a multiplier effect on output, with the value being equal to 1. Therefore, the correct choice is C, the balanced budget multiplier. Choices A, B, and D are incorrect as they do not refer to the specific multiplier that arises from equal increases in government spending and taxes.

The Multiplier That Arises from Equal Increases in Government Spending