how-does-a-decrease-in-taxes-affect-the-multiplier-effect-and-gdp

Question

How does a decrease in taxes affect the multiplier effect and GDP?

Accepted Answer

It increases household income, leading to an increase in GDP.

Answer

It has no effect on household income or GDP.

Answer

It decreases household consumption, leading to a decrease in GDP.

Answer

It decreases household income, leading to a decrease in GDP.