An argument in Keynesian economics that an increase in government spending on real goods and services combined with an equal increase in taxation, leaving the budget deficit or surplus unaltered, must increase national product by exactly the amount spent. The basic national income identity gives Y = C + I + G. Assume I is fixed and that the consumption function is C = a + b(Y − T), where T is income taxation. Then Y = a + b(Y − T) + I + G, and variations in Y, T, and G must satisfy dY = b(dY − dT) + dG. If the budget is balanced, then dT = dG and hence dY = dG, which is the balanced budget multiplier.