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Types of multiplier?
tree multiplier CSA (carry select adder) multiplier shift & add multiplier Higher radix multiplier
Difference between static and dynamic multiplier?
The concept of static multiplier implies that changes in investment causes change in income instantaneously. It means that there is no time lag between the change in investment and the change in income. It implies that the moment a rupee is spent on investment project, society's income increases by a multiple. Let us explain the concept of the dynamic multiplier also known as period and sequence multiplier. The concept of dynamic multiplier recognizes the fact that the overall change in income as a result of the change in investment is not instantaneous. There is a gradual process by which income change as a result of change in investment or other determinants of income. The process of change in income involves a time lag. The multiplier process works through the process of income generation and consumption expenditure. The dynamic multiplier takes into account the dynamic process of the change in income and the change in consumption at different stages due to change in investment. The dynamic multiplier is essentially a stage-by stage computation of the change in income resulting from the change in investment till the full effect of the multiplier is realized
Why does the multiplier differ between countries?
its due to different tax interest and import ratess
What happens to the income multiplier if the aggregate supply curve is vertical?
the multiplier is zero.
Difference between multiplier and accelerator in economics?
The multiplier in economics perspective implies that an initial income puts multiple effect in economy and becomes causes of growth and incomes of others. For example we presume that a person gets income amounting to Rs.1000/- and we also presume that Marginal Propensity to Consumption (MPC) is 3/4. It means that he will spend Rs.750/- (1000 x3/4) and the rest amount he keeps for precautionary measures / investment. His expenditure of Rs.750/- is the income of other person - he also will expend Rs.563/- and it becomes the income of other and he will expend Rs.422/-. In this way it is established that an initial income of Rs.1000/- will put effect at least four or five times on investment in the prevailing economy leading increase in Gross Domestic Product (GDP). On the other end Accelerator implies that when output increases in an economy it also increases / accelerates investment to great extent and briskly.
