How does Government expenditure on goods and services affect level of national income? Has it a...

 

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How does Government expenditure on goods and services affect level of national income? Has it a multiplier effect? What is the value of government expenditure multiplier? b. It is often asserted that budget deficit crowds out private investment. Do you agree? Explain. c. What is the effect of a balanced budget (i.e., increasing government expenditure matched by increase in equal amount of taxes) on national income, real interest rate and investment? a. d. Explain how balanced budget has an expansionary effect. What is the value of balanced budget multiplier? Explain e. How does cut in direct taxes lead to increase in national income? What is the size of lump sum tax multiplier? How does Government expenditure on goods and services affect level of national income? Has it a multiplier effect? What is the value of government expenditure multiplier? b. It is often asserted that budget deficit crowds out private investment. Do you agree? Explain. c. What is the effect of a balanced budget (i.e., increasing government expenditure matched by increase in equal amount of taxes) on national income, real interest rate and investment? a. d. Explain how balanced budget has an expansionary effect. What is the value of balanced budget multiplier? Explain e. How does cut in direct taxes lead to increase in national income? What is the size of lump sum tax multiplier?

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a Government expenditure on goods and services can have a significant impact on the level of national income When the government spends money on goods ... View the full answer