In the Long Run, the Multiplier

question 118

Multiple Choice

In the long run, the multiplier

• A)has a larger effect on real GDP than it has in the short run, because the multiplier effect has a longer time period to exert its impact on the economy.
• B)has a smaller effect on real GDP than it has in the short run because of changes in the price level.
• C)can have a smaller or larger effect on real GDP than it has in the short run.
• D)has a larger effect on real GDP than it has in the short run because of changes in the price level.
• E)has a larger effect on real GDP than it has in the short run, because there are more induced expenditures in the long run.

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Definitions:

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The process of setting objectives and successfully achieving them through planned actions and strategies.

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The degree to which targeted actions or treatments successfully achieve desired outcomes in addressing a problem.

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