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:

Continental Hot Spot

A region located within a continental landmass that exhibits volcanic activity due to a plume of hot material rising from beneath the Earth's crust.

Snake River Plain

A geographic feature in the U.S. states of Idaho and Oregon, characterized by a vast area of flatland through which the Snake River flows.

Afar Region

A region in the Horn of Africa, known for its volcanic activity and being part of the Afar Triple Junction where three tectonic plates meet.

Continental Hot Spot

A region above a stationary hot mantle plume that can cause volcanic activity in the middle of a tectonic plate.