If the economy is on the steep part of the aggregate supply curve, the output multiplier is close to zero.

Name: If the economy is on the steep part of the aggregate supply curve, the output multiplier is close to zero.
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Quizplus · Accepted Answer

When the economy is on the steep part of the aggregate supply curve, any increase in aggregate demand will mostly result in higher prices and only a small increase in output. Therefore, the output multiplier is close to zero in this situation.

If the Economy Is on the Steep Part of the Aggregate