In a closed economy with fixed or autonomous (non-income dependent)taxes,the balanced budget government purchases multiplier equals one.

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The balanced budget government purchases multiplier is defined as the change in equilibrium real GDP (or output) resulting from a change in government purchases, where any increase in government purchases is offset by an equal increase in taxes in order to maintain a balanced budget. In a closed economy with fixed or autonomous taxes, the balanced budget government purchases multiplier equals one, because the increase in government purchases is exactly offset by the increase in taxes, so there is no net effect on overall spending and output.

In a Closed Economy with Fixed or Autonomous (Non-Income Dependent)taxes,the