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Unformatted text preview: Multipliers 1. Expenditure o 1 / 1 - MPC = 1 / MPS 2. Tax Multiplier o 1 / MPS - 1 (add negative sign) 3. Balanced Budget Multiplier o 1 4. Money Multiplier o 1 / rr Withdrawals and Injections W = S + T J = I + G + (EX - IM) Contractionary Monetary Policy reduces the money supply and shifts the curve to the left Excess demand in a short run / long run curve tends to lead to raised prices...
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- Spring '99