the smaller the overall gain in national income is when compared with the amount of extra spending. The formula for the fiscal multiplier is as follows: Let's say that a national government enacts ...

For example, when looking at a national economy overall, the multiplier would be the change in real GDP divided by the change in investments, government spending, changes in income brought about ...

To answer this question, economists look at something known as the expenditure multiplier. It tells us how a change in consumption, investment, net exports or, in this case, government spending ...

If the multiplier is above one, it means that government spending draws in the private sector and generates more private consumer spending, private investment, and exports to foreign countries.

Economic theory suggests that the government spending multiplier and the paradox of toil are related, because both involve the (general equilibrium) relationship between factor supply conditions ...

"realistic" deviations from this model could well give you a negative multiplier -- that is, government spending reduces private spending more than dollar-for-dollar, thereby reducing total spending.

This multiplicative effect is called the ‘fiscal multiplier’ and is captured by a mathematical formula ... the multiplier for additional government spending is less than one.

The formula for the fiscal multiplier ... which may lead to a contractionary outcome. The fiscal multiplier assesses how government spending affects GDP based on the concept that when people ...