When the Multiplier Is Included in the IS Curve

Multiple Choice

When the multiplier is included in the IS curve:

A) a demand shock has a larger impact on short-run fluctuations than with the standard IS curve.
B) it has no impact on potential output.
C) a demand shock has a smaller impact on short-run fluctuations than with the standard IS curve.
D) a change in taxes has no impact on short-run output.
E) None of these answers is correct.