Author Question: Are the values of the multipliers in the short run and the long run larger or smaller than 2? ... (Read 101 times)

WhattoUnderstand · **on:** Jun 29, 2018

Are the values of the multipliers in the short run and the long run larger or smaller than 2?

What will be an ideal response?

Question 2

Refer to Table 9-11. With trade, what is the total gain in hat production?

A) 150 B) 300 C) 400 D) 650

emilymalinowski12 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

The multiplier in the short run is less than the multiplier of 2 because the short-run increase in real GDP is less than 200 billion. The long-run multiplier is even smaller. It equals zero.

Answer to Question 2

A