Data response (1)
Read the article:
and then answer the questions below.
Explain what is meant by the multiplier principle
Explain the reasons why there has been a shift in the thinking of many leading economists about the merits of fiscal policy.
Using aggregate supply and demand diagrams, examine the factors that determine the size of the multiplier effect following an increase in government spending.
Assess whether an increase in government spending and taxation by equivalent amounts will leave national income unchanged?