Suppose that input prices respond very slowly to output price. This will

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When input prices respond slowly to changes in output price, it means that costs for businesses do not immediately increase as demand (and therefore prices) increases. This allows businesses to produce more without facing immediate cost pressures, effectively enhancing the impact of any initial increase in spending throughout the economy. This scenario increases the value of the multiplier because the initial spending leads to more production, income, and further spending than it would if costs rose quickly in response to increased demand.

Suppose That Input Prices Respond Very Slowly to Output Price