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If the Economy Is Already Producing at Its Potential,_____

Question 64

Multiple Choice

If the economy is already producing at its potential,_____.


A) the spending multiplier equals 1/(1 - MPC) in the long run
B) the spending multiplier is less than 1/(1 - MPC) in the long run
C) the spending multiplier is more than 1/(1 - MPC) in the long run
D) the spending multiplier equals zero in the long run
E) the aggregate demand curve is horizontal

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