Suppose, the autonomous government expenditure multiplier is 2.5 and the autonomous tax multiplier is -2. Therefore, the balanced budget multiplier is:

Question

Quizplus · Accepted Answer

The balanced budget multiplier is calculated as the sum of the autonomous government expenditure multiplier and the autonomous tax multiplier. In this case, 2.5 (government expenditure multiplier) + (-2) (tax multiplier) = 0.5.

Suppose, the Autonomous Government Expenditure Multiplier Is 2