#1: Balance budget multiplier. An introductory and intermediate macroeconomics concept. If you raise lump sum taxes and government spending by equal amounts, GDP will increase by that amount. (Then why not just have a command and control economy? To clarify, much of introductory and intermediate macroeconomics has always seemed absurd to me--but it is especially so in this case.)
#2: "You're so vain, you probably think this song is about you." (But by addressing "you" it is about "you." Yes, I realize the absurdity may be intentional which would make it ironic, I suppose.)
1 comment:
Re: 1... IS-LM and the like are models for a bellow-capacity economy. The equilibrium is demand-determined and there are no limits within the model as to how much one can raise output by increases in autonomous expenditure, for example.
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