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1 year ago

The tax multiplier equals the change in divided by the change in .

Business

1 answer:

abruzzese [7]1 year ago

6 0

The tax multiplier equals the change in <u>real GDP</u> divided by the change in <u>taxes</u>.

<h3>Define the term tax multiplier?</h3>

A measure of the change in the Gross Domestic Product (GDP) in reaction to a change in governmental taxes is the tax multiplier.

Depending on whether the change in taxes affects all components of the GDP or just consumption, the TM can be simple or complex.
Governments, investors, and economists frequently employ TM to examine the effects of taxation changes on aggregate production.
The straightforward tax multiplier is now more typical.
It suggests that a change in aggregate production like a result of a change in government taxation only affects consumption expenditures.

Thus, the real GDP change divided by the change in taxes is the tax multiplier.

To know more about the tax multiplier, here

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2 years ago

The tax multiplier equals the change in​ ________ divided by the change in​ ________.

The tax multiplier equals the change in divided by the change in .