The balanced budget multiplier is based on the point that the ________ multiplier is larger than the ________ multiplier so that an equal increase in government expenditure and taxes ________ aggregate demand.
A)tax;expenditure;does not change
B)expenditure;tax;does not change
C)expenditure;tax;decreases
D)expenditure;tax;increases
E)tax;expenditure;decreases

Question

Quizplus · Accepted Answer

The balanced budget multiplier concept states that an equal increase in government spending and taxes will increase aggregate demand because the expenditure multiplier is larger than the tax multiplier.

The Balanced Budget Multiplier Is Based on the Point That