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  • Law
  • April 12th, 2013

How does government expenditure and taxation affect the multiplier in the standard Keynesian model

The essay has has 2 parts which are as follows;

PART `A`: What is meant by `A Shock To Aggregate Supply`? How can economic policy be implemented to counter such a shock?

PART `B`: How does government expenditure and taxation affect the multiplier in the standard Keynesian model? What would happen if the Government increased both taxes and the expenditures by the same amount?

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