Fiscal Policy: Multiplier Effect
With the Multiplier Effect tool you will learn how the government-induced chain of spending accumulates and results in an amplified change in GDP. Learning objectives include learning how the multiplier is calculated and how it works over time; understanding how the marginal propensity to consume (MPC) relates to the multiplier; and, learning how the government spending multiplier differs from the tax multiplier.
Select the Slide Deck for a guided assignment on this topic. Then click the Link to Platform to try the exercises yourself. Your instructor may have additional guidance regarding the use of this Teaching Tool.