How to close an inflationary or recessionary gap if larger

Reference no: EM13243415

Most macroeconomists believe it is a good thing that taxesact as automatic stabilizers and lower the size of themultiplier. However, a smaller multiplier means that the change ingovernment purchases of goods and services, government transfers, or taxes necessary to close an inflationary or recessionary gap is larger. How can you explain this apparent in consistency?

Reference no: EM13243415

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