Answer to Question #64983 in Economics of Enterprise for mo

Question #64983
We've seen that the government spending multiplier and the multiplier for changing taxes are different. For political and macroeconomic reasons governments often run balanced budgets. Suppose that G=T. Then suppose that the government increases spending and taxes equally to maintain a balanced budget. IE that: \begin{align*} G^{'}&=G+\Delta\\ T^{'}&=T+\Delta \end{align*} What is the value of the balanced budget multiplier. IE what multiple of delta does Y increase? https://fred.stlouisfed.org/series/GDPC1 https://fred.stlouisfed.org/series/UNRATE
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Expert's answer
2017-02-05T11:49:10-0500
The answer to the question is available in the PDF file https://www.assignmentexpert.com/homework-answers/economics-answer-64983.pdf

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