The magnitude of the tax multiplier ________ the magnitude of the government expenditure multiplier.

Question

Quizplus · Accepted Answer

The magnitude of the tax multiplier is smaller than the magnitude of the government expenditure multiplier because the tax multiplier affects the economy indirectly through changes in consumer spending, whereas the government expenditure multiplier has a direct impact on the economy through government spending.

The Magnitude of the Tax Multiplier ________ the Magnitude of the Government