Discuss what will happen when government spending is increased by 100 dollars and taxes are increased by the same amount. Will the income rise or fall or stay 还有其他两个问题,希望学过曼昆的宏观经济学的朋友能与我交流,谢谢 QQ:151457979
The income will increase 100 dollars. Because the tax multiplier is -MPS/(1-MPS), the income will increase -100*MPS/(1-MPS); The government spending multiplier is 1/(1-MPS), so tne income will increase 100/(1-MPS); (100/(1-MPS))+(-100*MPS/(1-MPS))=100
The income will rise.The Goverment expenditure multiplier is 1/(1-b),and the Tax multiplier is -1/(1-b),so when government spending and taxes are increased by the same amount ,the income will rise because the Goverment expenditure multiplier is larger than the Tax multiplier