Re: Multiplier question..

Posted by Homer Simpson on Apr 27, 2014; 6:10pm
URL: http://discussion-forum.276.s1.nabble.com/Multiplier-question-tp7587900p7587907.html

it is not said explicitly but i reckon this is a case of balanced budget multiplier. Govt is increasing G - this would mean more AD and Y. Now this higher Y also has an effect on tax collections along with the dampening effect of higher tax rates. Usually overall Y will rise.

was wondering though! if i have both the IS LM market going on, would balanced budget multiplier be different from 1? any thoughts on this?