The balanced budget multiplier is always equal to:
A) 0.50.
B) 0.75.
C) 1 / MPC.
D) 1.

Name: The balanced budget multiplier is always equal to: A) 0.50. B) 0.75. C) 1 / MPC. D) 1.
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Question

Quizplus · Accepted Answer

The balanced budget multiplier is always equal to 1 because an equal increase in government spending and taxes will raise income by the same amount as the increase in spending, assuming no changes in savings, investment, or net exports.

The Balanced Budget Multiplier Is Always Equal To