Answer to Question #12962 in Macroeconomics for Rachel
a) Is the government running a surplus or a deficit? Explain your answer
b) Explain the reason why the multiplier could decrease in value.
deficit because of decreasing GDP and restricting existing
Otherwise, government running a surplus.
b) multiplier could
decrease because of impact of taxes, when taxes are growing up , GDP is growing
down/ Changing of GDP is decreasing and multiplier in this case could decrease
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