Which of the following is likely to be true when an economy is in a boom?
A) The size of the government expenditure multiplier is small.
B) The size of the government expenditure multiplier is large.
C) The unemployment rate is high.
D) The inflation rate is negative.

Question

Quizplus · Accepted Answer

During an economic boom, the economy is operating near or at full capacity, meaning additional government spending will have less of an impact on output, resulting in a smaller government expenditure multiplier.

Which of the Following Is Likely to Be True When