In the long run, the multiplier
A) is greater than 1 because of the position and slope of the SAS curve.
B) is twice the short-run multiplier.
C) is zero.
D) depends on the slope of the AD curve.

Question

Quizplus · Accepted Answer

In the long run, the multiplier is considered to be zero because any increase in aggregate demand is thought to result in increases in prices rather than increases in real output, due to the economy operating at or near full capacity.

In the Long Run, the Multiplier