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Introduction to Economics 2
Introduction to Economics 2 Deneme Sınavı
Introduction to Economics 2 Deneme Sınavı Sorusu #350023
Introduction to Economics 2 Deneme Sınavı Sorusu #350023
If the government increases its expenditures by 100 liras and completely finances it by increasing taxes, what is the value of change in GDP?
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100 liras increase
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100 liras decrease
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200 liras increase
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GDP does not change |
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The change cannot be calculated without knowing the value of marginal propensity to consume or to save |
Yanıt Açıklaması:
In case of changes in public expenditures and taxes are the same, the numerical value of net multiplier being equal to 1 is called as balanced budget multiplier. Since the value of the multiplier in this case will become 1, then ΔY = (1) x ΔG and ΔY= 100.
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