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What happens to the income multiplier if the aggregate supply curve is vertical?
Wiki User
∙ 10y ago
the multiplier is zero.
Wiki User
∙ 10y ago
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Explain the working of foreign trade multiplier and bringout its global implications?
The foreign trade multiplier is also known as the export multiplier. This happens in an open economy, and brings change in exports and change income. The global implications are that countries can trade with each other and raise their own income.
What is aggregate income?
The total amount that households and businesses receive before taxes and other expenses are deducted is called aggregate income.
Difference between static and dynamic multiplier?
The concept of static multiplier implies that changes in investment causes change in income instantaneously. It means that there is no time lag between the change in investment and the change in income. It implies that the moment a rupee is spent on investment project, society's income increases by a multiple. Let us explain the concept of the dynamic multiplier also known as period and sequence multiplier. The concept of dynamic multiplier recognizes the fact that the overall change in income as a result of the change in investment is not instantaneous. There is a gradual process by which income change as a result of change in investment or other determinants of income. The process of change in income involves a time lag. The multiplier process works through the process of income generation and consumption expenditure. The dynamic multiplier takes into account the dynamic process of the change in income and the change in consumption at different stages due to change in investment. The dynamic multiplier is essentially a stage-by stage computation of the change in income resulting from the change in investment till the full effect of the multiplier is realized
What is the concept of Multiplier?
The concept of Multiplier highlights the effects of initial investment upon national income through changes in consumption expenditure.
Why GDP equals aggregate expenditure and aggregate income?
GDP would be the amount of gross income a person or company receives. This would be the amount of income minus the amount of expenditure on things like bills.
Explain the working of foreign trade multiplier and bringout its global implications?
The foreign trade multiplier is also known as the export multiplier. This happens in an open economy, and brings change in exports and change income. The global implications are that countries can trade with each other and raise their own income.
Why tax multiplier is negative.show graphically the negative impact of tax multiplier on income?
tax multiplier is negative because when government imposes tax, the income decreases
What happens to aggregate income and withdrawals when exports increase?
there is no answer hahahaha / oh very intelligent - well done !!
Difference between static and dynamic multiplier?
The concept of static multiplier implies that changes in investment causes change in income instantaneously. It means that there is no time lag between the change in investment and the change in income. It implies that the moment a rupee is spent on investment project, society's income increases by a multiple. Let us explain the concept of the dynamic multiplier also known as period and sequence multiplier. The concept of dynamic multiplier recognizes the fact that the overall change in income as a result of the change in investment is not instantaneous. There is a gradual process by which income change as a result of change in investment or other determinants of income. The process of change in income involves a time lag. The multiplier process works through the process of income generation and consumption expenditure. The dynamic multiplier takes into account the dynamic process of the change in income and the change in consumption at different stages due to change in investment. The dynamic multiplier is essentially a stage-by stage computation of the change in income resulting from the change in investment till the full effect of the multiplier is realized
What is aggregate income?
The total amount that households and businesses receive before taxes and other expenses are deducted is called aggregate income.
What is the private investment multiplier?
the private investment multiplier is the change in national income resulting from a change in private investment spending
What is the concept of Multiplier?
The concept of Multiplier highlights the effects of initial investment upon national income through changes in consumption expenditure.
According to the Multiplier Equation equilibrium income will be equal to the multiplier divided by autonomous expenditures?
Actually it is the change in the equilibrium expenditure divided by the change in autonomous expenditure. That will equal the expenditure multiplier.
Why GDP equals aggregate expenditure and aggregate income?
GDP would be the amount of gross income a person or company receives. This would be the amount of income minus the amount of expenditure on things like bills.
What are the 5 aggregate measures of national income?
Yea
What happens during a economic expansion?
What increases, decreases and stays the same during a economic expansion? Choices: tax revinue, consumer income, budget surplus, aggregate demand, budget deficit, aggregate supply, real GDP, corporate profits
What is static multiplier?
A static multiplier assumes that an investment change, whether good or bad, causes an income spike or loss immediately. This is not always so.
