If the economy is operating within the intermediate or vertical range of the aggregate supply curve, an increase in aggregate demand will produce:

A) a larger multiplier than if the economy were in the horizontal range. ‘

B) a decline in real GDP.

C) the same sized multiplier as if the economy were in the horizontal range.

D)  a smaller multiplier than if the economy were in the horizontal range.

ANSWER:

D)  a smaller multiplier than if the economy were in the horizontal range.