What would be the multiplier of the economy

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The increase in the share of profits in national income has brought about demands for an increase in corporate tax. Consider a closed economy where the share of profits in national income is α, and where d of the after-tax profits are distributed as dividend. The remaining profits are invested. There is a proportional tax system comprising of different rates for income tax and corporate tax.

What would be the multiplier of the economy?

Reference no: EM13189003

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