the tax multiplier must always be (positive or negative) because an increase in taxes will lead to a (reduction or increase) in real gDP Correction: The tax multiplier must always be negative because an increase in taxes will lead to a reduction in real GDP.
Added by Tom-S G.
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The tax multiplier is an economic term that describes the effect of a change in taxes on the real Gross Domestic Product (GDP). It is a measure of how much the real GDP changes in response to a change in taxes. Show more…
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