Economics (2 Viewers)

[tezza23]

Does any1 have any ideas or know where to find info on this question:

Why does a $1 tax cut have a smaller multiplier effect than a $1 increase in government spending on goods and services?

If any1 knows and can suggest anything, it will be greatly appreciated! =)

Cheers
Terry

 

[bored of sc]

Does any1 have any ideas or know where to find info on this question:

Why does a $1 tax cut have a smaller multiplier effect than a $1 increase in government spending on goods and services?

If any1 knows and can suggest anything, it will be greatly appreciated! =)

Cheers
Terry

I'm sure you already understand this logic but when taxes are cut the the Government lose potential money and when the Government choose to spend more money they also lose money (I need an economics for dumbies book)

so both have similar financial effects on the Government

not sure about an explaination nor examples

cya