Consider the following table: Year 2012 2013 Potential GDP $14.9 trillion $15.3 trillion Real GDP $14.9 trillion $15.2 trillion Price Level 110 112 What can we expect from the Federal Reserve Bank if it seeks to move the economy in the direction of long-run macroeconomic equilibrium? OA. The Fed will pursue a contractionary monetary policy. B. The Fed will pursue a contractionary fiscal policy. c. The Fed will pursue an expansionary monetary policy. OD. The Fed will pursue an expansionary fiscal policy. If the Fed's policy is successful, what is the effect on the following indicators? Actual real GDP: Potential real GDP: Price level: Unemployment:
Consider the following table: Year 2012 2013 Potential GDP $14.9 trillion $15.3 trillion Real GDP $14.9 trillion $15.2 trillion Price Level 110 112 What can we expect from the Federal Reserve Bank if it seeks to move the economy in the direction of long-run macroeconomic equilibrium? OA. The Fed will pursue a contractionary monetary policy. B. The Fed will pursue a contractionary fiscal policy. c. The Fed will pursue an expansionary monetary policy. OD. The Fed will pursue an expansionary fiscal policy. If the Fed's policy is successful, what is the effect on the following indicators? Actual real GDP: Potential real GDP: Price level: Unemployment:
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter16: The Influence Of Monetary And Fiscal Policy On Aggregate Demand
Section: Chapter Questions
Problem 8PA
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