Author Question: If the economy is already at its potential output, then the spending multiplier is: a. zero in the ... (Read 27 times)

Jramos095 · **on:** Jun 30, 2018

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.

Question 2

If an economy produces final output worth 5 trillion, then the aggregate income generated by that production:
a. will be 5 trillion.
b. will be more than 5 trillion.
c. will be 5 trillion minus taxes.
d. will be less than 5 trillion.
e. will be 5 trillion plus transaction costs.