In the Long Run, the Multiplier

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.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free