Question

explain why the tax multiplier is smaller in absolute value than the government expenditure multiplier​

Answer 1

The tax multiplier is smaller in absolute value than the government expenditure multiplier because the government expenditure affects the total expenditure and taxes through the multiplier. The tax multiplier also influences the disposable income which affects the overall consumption level.

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Answer 2

Answer:

The tax multiplier is smaller in absolute value than the government expenditure multiplier because the government expenditure affects the total expenditure and taxes through the multiplier. The tax multiplier also influences the disposable income which affects the overall consumption level.

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