Given below are two statements: Statement (I): Balanced budget multiplier is equal to one under lump sum taxes. Statement (II): Increase in taxes offsets increase in government expenditure partially. Choose the correct answer:

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Economics · Balanced Budget Multiplier

Given below are two statements: Statement (I): Balanced budget multiplier is equal to one under lump sum taxes. Statement (II): Increase in taxes offsets increase in government expenditure partially. Choose the correct answer:

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Correct answer

Both I and II are correct

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Answer 1

Both I and II are correct

Answer 2

Both I and II are incorrect

Answer 3

I is correct but II is incorrect

Answer 4

I is incorrect but II is correct

Given below are two statements: Statement (I): Balanced budget multiplier is equal to one under lump sum taxes. Statement (II): Increase in taxes offsets increase in government expenditure partially. Choose the correct answer:

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Given below are two statements: Statement (I): Balanced budget multiplier is equal to one under lump sum taxes. Statement (II): Increase in taxes offsets increase in government expenditure partially. Choose the correct answer:

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