If the multiplier for autonomous government purchases equals 4,then it is true that the simple tax multiplier
A)equals -4
B)equals -3
C)always equals 1
D)is the same as the original multiplier
E)is invariably equal to 5

Question

Quizplus · Accepted Answer

The simple tax multiplier is one less than the government spending multiplier in absolute value, so if the spending multiplier is 4, the tax multiplier is -3.

If the Multiplier for Autonomous Government Purchases Equals 4,then It