multiplier

Question 1

what is the multiplier effect

Answer 1

occurs when an initial injection into the circular flow causes a bigger final increase in real national income.

Question 2

what is the ratio of final change (multiplier effect)

Answer 2

the ratio of the final change in the income to change in the injection is the value of the multiplier

Question 3

what is the equation for the value of the multiplier

Answer 3

value of the multiplier=change in national income/change in injection

Question 4

what is discretional fiscal policy

Answer 4

are intentional government policies to increase or decrease government spending or taxation

Question 5

what is cyclical fiscal policy

Answer 5

measure with counteract the effects of the economic cycle