1.7 The hypothetical information in the table below shows what the values for real GDP and the price level would have been in 2019 if the Federal Reserve did not use monetary policy: Year 2018 2019 If the Fed wanted to keep real GDP at Sup d. Potential Real GDP $18.5 trillion 19.0 trillion Real GDP The inflation ra The unem ment rate Real GDP $18.5 trillion 19.4 trillion Price Level 142 150 should it c) Draw an aggregate demand and aggregate supply graph to illustrate your answer. Be sure that your graph contains LRAS curves for 2018 and 2019; SRAS curves 2018 and 2019; AD curve for 2018 and 2019, with and without monetary policy actions; and equilibrium real GDP and the price level in 2019 with and without policy.

1.7 The hypothetical information in the table below shows what the values for real GDP and the price level would have been in 2019 if the Federal Reserve did not use monetary policy: Year 2018 2019 If the Fed wanted to keep real GDP at Sup d. Potential Real GDP $18.5 trillion 19.0 trillion Real GDP The inflation ra The unem ment rate Real GDP $18.5 trillion 19.4 trillion Price Level 142 150 should it c) Draw an aggregate demand and aggregate supply graph to illustrate your answer. Be sure that your graph contains LRAS curves for 2018 and 2019; SRAS curves 2018 and 2019; AD curve for 2018 and 2019, with and without monetary policy actions; and equilibrium real GDP and the price level in 2019 with and without policy.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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