The tax multiplier negative and smaller in absolute value th

The tax multiplier negative and smaller in absolute value than the govenment spending O an increase in taxes causes aggregate expenditure to shift downwards by an amount that is smaller than the increase in taxes. o an increase in taxes causes aggregate expenditure to shit downwards by an amount that is larger than the increase in taxes. O an increase in government spending causes people to expect higher taxes in the future O a decrease in taxes causes people to expect higher taxes in the future

Solution

A is the correct option

Reason

An increase in taxes causes a shift in aggregate expenditure since the multiplier is smaller, the corresponding increase will be smaller compared to government spending.