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A static multiplier assumes that an investment change, whether good or bad, causes an income spike or loss immediately. This is not always so.

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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


Types of multiplier?

tree multiplier CSA (carry select adder) multiplier shift & add multiplier Higher radix multiplier


What happens to the income multiplier if the aggregate supply curve is vertical?

the multiplier is zero.


Why can't you have a money multiplier of inifinity?

The money multiplier is the reciprocal of the reserve requirement, which can only be a finite number.


What is Balanced budget multiplier?

BALANCED-BUDGET MULTIPLIER:A measure of the change in aggregate production caused by equal changes in government purchases and taxes. The balanced-budget multiplier is equal to one, meaning that the multiplier effect of a change in taxes offsets all but the initial production triggered by the change in government purchases. This multiplier is the combination of the expenditures multiplier, which measures the change in aggregate production caused by changes in an autonomous aggregate expenditure, and the tax multiplier which measures the change in aggregate production caused by changes in taxes.

Related Questions

Difference between static multiplier dynamic multiplier?

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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


Types of multiplier?

tree multiplier CSA (carry select adder) multiplier shift & add multiplier Higher radix multiplier


Is a seesaw a force multiplier or a speed multiplier?

force multiplier


What is super multiplier?

super multiplier refers to interaction of the multiplier and accelerator.


Is a bottle opener a speed or force multiplier?

Force Multiplier


Finite population multiplier in finance management?

finite population multiplier finite population multiplier


If the tax multiplier is -2 what is the government multiplier?

3


Is pulley a speed multiplier or a force multiplier?

force


Which part of the multiplication sentence tells how many times a number is multiplied?

The multiplier. The multiplicand is multiplied by the multiplier to create the product.


If the government spending multiplier is 6 what is the tax multiplier?

9


How do you set up a runescape multiplier?

Depends in what you mean by multiplier