WHATS YOUR FEEDBACK ON THIS DISCUSSION POST

The spending multiplier is the result of, adding the marginal propensity to consume (MPC) and marginal propensity to save (MPS) which must always equal 1. Once the MPC and MPS are determined, 1/1-MPC will show the spending multiplier. This is representative of an increase in income that in turn, becomes new income for others after the purchases made from this new, initial increase in income. The tax multiplier is money removed from the economy by way of taxes on goods and services and is determined by -MPC/MPS. The tax multiplier reflects the changes in real GDP as a result of imposed taxes. The difference between the spending and tax multiplier is always 1 - either the spending multiplier is 1 greater than the tax multiplier, or the tax multiplier is 1 less than the spending multiplier. The spending multiplier is influenced by income and can be spent, while the tax multiplier is beholden to government increases (or decreases) in taxes. If I were to receive an additional $1000, likely more than half would go towards my monthly rent payment and the rest would go into savings. In a more fantastical scenario where all my bills are paid and I have no extraneous expenses to consider, I would purchase a new rug for my living room and a piece of furniture. In turn, my $1000 would cover shipping fees of said rug and piece of furniture (presuming both are coming from the same business). This would also contribute to the paychecks of the warehouse workers and managers. If I custom-ordered a rug from an independent artisan, my funds would be used to purchase materials, account for their time used to weave my custom rug, and cover the shipping fees to send it to me. In this second scenario, I would not be able to purchase a new piece of furniture with my extra $1000 as artisan and custom goods tend to have a higher price point. Anything left over from this custom order, I would then save.