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Data response (1)


Read the article:

and then answer the questions below.


Question 1

Explain what is meant by the multiplier principle

Question 2

Explain the reasons why there has been a shift in the thinking of many leading economists about the merits of fiscal policy.

Question 3

Using aggregate supply and demand diagrams, examine the factors that determine the size of the multiplier effect following an increase in government spending.

Question 4

Assess whether an increase in government spending and taxation by equivalent amounts will leave national income unchanged?