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NYC NYC
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8 years ago
Firms have no inventories that they can draw down to meet an increase in demand. This will:
A) have no effect on the multiplier, because the MPC remains unchanged.
B) increase the size of the multiplier, because output will need to immediately respond to changes in demand.
C) decrease the size of the multiplier, because firms will be able to respond more quickly to a change in demand.
D) either increase or decrease the multiplier, depending on the size of the MPC.
Textbook 
Principles of Macroeconomics

Principles of Macroeconomics


Edition: 11th
Authors:
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JesslynJesslyn
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8 years ago
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NYC Author
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#2
8 years ago
Thanks for answering Slight Smile
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#3
4 years ago
thank you
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