If the Economy Is Already at Its Potential Output, Then

question 44

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.

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Definitions:

Cult of Domesticity

A prevailing value system among the upper and middle classes during the 19th century in the United States and Britain that emphasized the virtues of women in their roles as mothers and housewives.

Marquis de Lafayette

A French aristocrat and military officer who played a significant role in the American Revolution by aiding the Thirteen Colonies in their quest for independence from Britain.

American Independence

The historical event achieved in 1776 when the Thirteen Colonies successfully declared their independence from British rule, marked formally by the Declaration of Independence.

Land of Slavery

A term often used to describe regions or countries where slavery was legally practiced and integral to the economy and society.