Suppose long-run potential GDP is $10 trillion in 2023, and actual measured GDP in 2023 turns out to be $9.5 trillion. (a) Calculate the short-run output as defined in our course, Ỹ. (b) Is the economy considered in recession in 2023? Explain why or why not. (c) Briefly explain what the Fed can do to bring short-run GDP to the potential level in 2024, using the short-run model we studied in the second half of the course
Suppose long-run potential GDP is $10 trillion in 2023, and actual measured GDP in 2023 turns out to be $9.5 trillion. (a) Calculate the short-run output as defined in our course, Ỹ. (b) Is the economy considered in recession in 2023? Explain why or why not. (c) Briefly explain what the Fed can do to bring short-run GDP to the potential level in 2024, using the short-run model we studied in the second half of the course
Principles of Economics (MindTap Course List)
8th Edition
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter36: Six Debates Over Macroeconomic Policy
Section: Chapter Questions
Problem 1PA
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Suppose long-run potential
(a) Calculate the short-run output as defined in our course, Ỹ.
(b) Is the economy considered in recession in 2023? Explain why or why not.
(c) Briefly explain what the Fed can do to bring short-run GDP to the potential level in 2024,
using the short-run model we studied in the second half of the course.
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