Macroeconomics/Expanded Multipliers

=Expanded Multipliers=
 * The simple k assumes no government or overseas (o/s) sectors in the economy. In reality Y will be subject to taxation, imports and savings before it will be spent in the domestic economy. Thus various complex multipliers incorporates these flows and is a smaller coefficient than [k = 1/MPS].

The Multiplier

 * The operation of the multiplier is essentially the same but consumption is reduced by acknowledging the other leakages in the economy.
 * This multiplier is applicable to all direct spending in the economy, including government spending.

Taxes/Transfers Multiplier

 * This multiplier is applicable to all indirect injections into the economy, such as cutting taxes or increasing government transfers. The multiplier is positive because it implies a positive change, or increase, in the input. (taxes).

Balanced Budget Multiplier

 * This multiplier is used when the government increases spending and uses a tax increase to pay for the spending. To model change in expenditure when the government decreases spending and cuts taxes to cover the costs, multiply by a negative input in expenditure.