[Solved] If the Economy Is Already at Its Potential Output, Then

Question 62

Multiple Choice

Question 62

Multiple Choice

If the economy is already at its potential output, then the spending multiplier is _____

A) equal to zero in the long run.
B) infinite in the long run.
C) equal to 1 in the long run.
D) equal to zero in the short run.
E) equal to 1 in the short run.

Correct Answer:

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