Asked by
Capri Callis
on Nov 11, 2024
Verified
If the economy is already at its potential output,then the spending multiplier is:
A) zero in the long run.
B) infinite in the long run.
C) equal to 1 in the long run.
D) zero in the short run.
E) equal to 1 in the short run.
Spending Multiplier
The ratio of a change in national income to a change in government spending that causes it, indicating the impact of fiscal policy on the economy.
Long Run
A period of time in economics where all factors of production and costs are variable, and all market adjustments have been made.
- Identify the immediate and extended impacts of fiscal policies on the economic landscape.
Verified Answer
LS
Learning Objectives
- Identify the immediate and extended impacts of fiscal policies on the economic landscape.