The balanced budget multiplier For both political and macroeconomic reasons, governments are often reluctant to run budg

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The Balanced Budget Multiplier For Both Political And Macroeconomic Reasons Governments Are Often Reluctant To Run Budg 1 (91.61 KiB) Viewed 10 times

The balanced budget multiplier For both political and macroeconomic reasons, governments are often reluctant to run budget deficits. Here, we examine whether policy changes in G and T that maintain a balanced budget are macroeconomically neutral. Put another way, we examine whether it is possible to affect output through changes in G and T so that the government budget remains balanced. Using the following formula: 1 -0₁) (00+ 1+ G-G₁T), where со = autonomous consumption and c₁ = propensity to consume. Y= By how much does Y channge when G increases by one? AY=. (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a subscript can be created with the character.)