the multiplier effect occurs when an initial increase (or decrease) in autonomous expenditure produces a greater increase (or decrease) in real gdp than the initial change. in which type of discretionary fiscal policy does the multiplier play a role? neither government spending changes nor tax changes government spending changes only tax changes only both government spending changes and tax changes assume a marginal propensity to consume (mpc) of 0.5. which discretionary fiscal policy would have a more pronounced impact on the economy? a 700 billion dollar increase in government spending, or a 700 billion dollar tax cut, would both have an equal impact on the economy. a 700 billion dollar tax cut would have a more pronounced impact on the economy. a 700 billion dollar increase in government spending would have a more pronounced impact on the economy.