There is debate among economists over whether or not the government spending multiplier is greater than the tax multiplier.

Question

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The government spending multiplier is the idea that when the government spends money, it creates a larger increase in economic output than the amount spent. The tax multiplier is the idea that when taxes are cut, it creates a larger increase in economic output than the amount of the tax cut. While there is debate among economists, many argue that the government spending multiplier is typically greater than the tax multiplier.

There Is Debate Among Economists Over Whether or Not the Government