The Application of Multiplier Theory —— A Study on the Ways to Increase National Income by Using Multiplier Theory

In the case that there is little room for the increase of export tax rebate rate, we can adopt timely tax rebate and full tax rebate to solve some of the difficulties in capital turnover caused by the lag of export tax rebate. Take incentive measures in export credit to expand exports. At the same time, we should actively use the preferential policies given to developing countries by the WTO to expand exports, optimize the structure of export products and improve the terms of trade. Actively coordinate trade with other countries, provide relevant information for enterprises in time, and help enterprises grow rapidly. Actively respond to trade frictions, participate in the formulation of game rules, strive for a favorable trade environment as much as possible, and clear the obstacles for domestic products to go global smoothly. Actively create conditions to attract foreign investment, especially multinational companies to invest in high-tech industries and participate in the restructuring and transformation of state-owned enterprises and infrastructure construction. Accelerate the study and formulation of policies and measures for foreign investors to participate in the restructuring and transformation of Chinese enterprises through mergers and acquisitions. By vigorously introducing foreign capital, we will promote the national economy and increase national income.

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Investment multiplier: refers to the ratio of the change of income to the change of investment expenditure that causes this change.

Government purchase multiplier: refers to the ratio between the change of income and the change of government purchase expenditure that causes this change.

Tax multiplier: refers to the ratio of income change to tax change that causes this change.

Multiplier of government transfer payment: refers to the ratio between the change of income and the change of government transfer payment that causes this change.

Balanced budget multiplier: refers to the ratio of the change of national income to the change of government revenue and expenditure when the government revenue and expenditure increase or decrease by the same amount at the same time. Kb= 1 .

Foreign trade multiplier: indicates the change of national income caused by export increase 1 unit.