Macroeconomics – Fiscal Policy -The Multiplier Effect

The multiplier effect

Tax Multiplier

This is the change in aggregate demand caused by a change in taxation levels.

Spending and taxation are the two levers available to Government for setting fiscal policy. In an expansionary fiscal policy, the Government increases it’s spending, cuts taxes or a combination of both. The increase in spending and tax cuts will increase aggregate demand, but the extent of the increase depends on the spending and tax multipliers.

The tax multiplier is smaller than the Government expenditure multiplier because some of the increase in disposable income that results from lower taxes is just not consumed but saved.

Boundless Economics

Intel to create 1,600 jobs at Leixlip campus

“The level of Intel’s commitment to Ireland and its impact on the Irish economy has been, and will continue to be, enormous,” said IDA Chief Executive Martin Shanahan.

“The scale of the investment and the number and types of jobs being created is a huge vote of confidence in the Leixlip campus and is testament to Intel’s continued commitment to Ireland.

“Furthermore, the company has signaled that there will be an opportunity for additional investment as it plans to announce another phase of expansions in locations including Europe in the next year.”

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