The Multiplier Effect Is Smallest

question 103

Multiple Choice

The multiplier effect is smallest

• A) in the long run.
• B) in the short run.
• C) when the price level is fixed.
• D) when the economy is in a recession.

---

Definitions:

Hedge

An investment position intended to offset potential losses or gains that may be incurred by a companion investment, commonly used for risk management.

Exchange Variations

Refers to the fluctuations in the value of currencies in the foreign exchange market, impacting the value of foreign currency transactions.

Foreign Currency

Foreign Currency is the currency of another country, which is required for conducting international transactions or investments.

Annual Repayments

are fixed amounts paid back by a borrower to a lender at regular intervals over a year to reduce or settle a loan's principal and interest.