Fiscal Multiplier

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Fiscal Multiplier

The fiscal multiplier estimates the final change in real national income (GDP) that results from an initial (exogenous) change in government spending and/or revenue plans.

For example, if a £5 billion increase in government spending on flood defence leads to a £12 billion final increase in real GDP, then the fiscal multiplier = £12 billion / £5 billion = +2.4

In the News Teaching Activity – Can the UK afford a big rise in defence spending? (July 2026)

13th July 2026
In the News Teaching Activity – Is the recent reduction in government borrowing likely to last? (May 2026)

7th May 2026
Macro Case Study: UK debt

Topical case studies
In the News Teaching Activity – Can the Budget measures help to boost UK living standards? (Dec 2025)

1st December 2025
In the News Teaching Activity – How could higher capital spending by the government help the UK economy? (June 2025)

10th June 2025
In the News Teaching Activity – how might an increase in UK spending on defence affect the economy? (Mar 2025)

10th March 2025
Fiscal Drag in the UK Economy

18th February 2025
In the News Teaching Activity – how concerning is the increase in government borrowing? (Jan 2025)

30th January 2025
In the News Teaching Activity – how will the Budget’s fiscal changes affect the economy? (Nov 2024)

7th November 2024
How can changes in tax affect aggregate demand?

Study Notes
In the News Teaching Activity – will the Chancellor relax fiscal rules to invest? (Oct 2024)

14th October 2024
IB Economics - Evaluation of Fiscal Policy

Study Notes
IB Economics - The Nature of the Keynesian Multiplier

Study Notes
2.4.4 The Multiplier

Study Notes
Edexcel A-Level Economics (A) Theme 2 Knowledge Organiser Pack 2

Exam Support
UK Economy - The Borrowing for Investment Debate

9th January 2024
2.6.2. Fiscal Policy - Budget Deficits Surpluses and Debt (Edexcel A-Level Economics Teaching PowerPoint)

Teaching PowerPoints
2.4.4 The Multiplier (Edexcel A-Level Economics Teaching PowerPoint)

Teaching PowerPoints
4.2.2.4 The Multiplier Process (AQA A Level Economics Teaching Powerpoint)

Teaching PowerPoints
Fiscal Policy - Explaining Automatic Stabilisers

Topic Videos
Fiscal Policy - Crowding Out

Study Notes
Kahoot and Quizlet Resources on Fiscal Policy

25th April 2023
What is Crowding In?

Study Notes
Explaining and Calculating the Simple and Extended Multiplier

Topic Videos
Key Diagrams - Fiscal Policy and Crowding Out

Topic Videos
Explaining the Multiplier Effect

Study Notes
Public investment and employment effects

23rd August 2016
Fiscal Policy - Managing Aggregate Demand and Inflation

Study Notes
Monetary and Fiscal Policy Revision Quiz

Quizzes & Activities
Macro Revision - Aspects of Fiscal Policy

Teaching PowerPoints
The Multiplier Effect

Topic Videos
Biden's huge fiscal stimulus bill is approved

11th March 2021
Economics of Fiscal Drag

Topic Videos
The fiscal multiplier of $2 trillion of stimulus spending

15th January 2021
Sunak's Plan for Jobs

8th July 2020
The Fiscal Multiplier

Topic Videos
Explaining the Multiplier and the Accelerator

Topic Videos
German Economy - A Level Economics Data Response Plan

Exam Support
Evaluating the effects of rising national debt

Topic Videos
Evaluating Fiscal Policy (Online Lesson)

Online Lessons
Coronavirus crisis: Keynesian insights

Topic Videos
Corporation Tax and Aggregate Demand & Supply

Topic Videos
Economics of a Budget (Fiscal) Surplus

Topic Videos
Test 11 - Edge in Economics Revision MC: Fiscal Policy

Quizzes & Activities
Calculating the Multiplier - Worked Examples

Topic Videos
Edexcel Theme 2 Macro Knowledge Book - The Multiplier and Economic Growth

Quizzes & Activities
Understanding the Economics of John Maynard Keynes

Study Notes
Fiscal Policy - Causes of a Budget Deficit

Study Notes
Test 12: A Level Economics: MCQ Revision on Economic Cycles and the Multiplier

Practice Exam Questions
Test 10: A Level Economics: MCQ Revision on Fiscal Policy

Practice Exam Questions
Crowding-Out

Topic Videos
The Dangers of Fiscal Policy

5th October 2017
How Big is My Multiplier?

6th September 2012
Is George Osborne a closest Keynesian?

24th December 2014
Supply side success is a cure for the drug of deficit finance

18th June 2015
Cutting spending can be expansionary

12th August 2015
The joy of the big revamped railway station

12th October 2015

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Fiscal Multiplier