A-LevelEconomicsFiscal PolicyMay/June 2018Paper 3 Q261 Mark
In a Keynesian model, why would a $100 million increase in government expenditure on goods and services have a greater impact on aggregate demand than a $100 million reduction in tax revenue? A Consumers spend only part of any extra disposable income. B Government expenditure does not create wealth. C The marginal tax rate affects the value of the multiplier. D The multiplier does not apply to consumer expenditure.
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