In the Long Run, the Multiplier

question 49

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 larger effect on real GDP than it has in the short run, because there are more induced expenditures in the long run.
• C)has a larger effect on real GDP than it has in the short run because of changes in the price level.
• D)has a smaller effect on real GDP than it has in the short run because of changes in the price level.
• E)can have a smaller or larger effect on real GDP than it has in the short run.

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Definitions:

Linear

Characterized by sequential progression where events or operations follow one after the other in a straight line.

Interrelated

Things or elements that are connected in such a way that each one influences or affects the others.

High-context Cultures

Societies or groups where communication is often indirect, and understanding depends heavily on context, non-verbal cues, and shared backgrounds.