Aggregate Demand and Supply: End of Chapter Problems 13. The U.S. economy has significantly expanded since recovering from the severe effects of the 2007-2009 recession. In 2019 , the unemployment rate was under 4%, below the natural rate of unemployment. Thus, the economy was at or beyond full employment. Provided that the economy is at full employment, what is the effect of the multiplier when the government increases government spending and reduce taxes to boost aggregate demand? a. The increase in aggregate demand has on real output. b. Which of the following explains this result? The multiplier regarding real output is smaller at full employment. Real output does not change in the long run. Prices and wages are sticky in the long run. Aggregate Demand and Supply: End of Chapter Problems 13. The U.S. economy has significantly expanded since recovering from the severe effects of the 2007-2009 recession. In 2019 , the unemployment rate was under 4%, below the natural rate of unemployment. Thus, the economy was at or beyond full employment. Provided that the economy is at full employment, what is the effect of the multiplier when the government increases government spending and reduce taxes to boost aggregate demand? a. The increase in aggregate demand has on real output. b. Which of the following explains this result? The multiplier regarding real output is smaller at full employment. Real output does not change in the long run. Prices and wages are sticky in the long run