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: Price Level Year 2018 2019 bills Potential Real GDP $18.5 trillion 19.0 trillion ted to keep real G d them? Real GDP a. Real GDP b. Full-employment real GDP c. The inflation rate d. The unemployment rate $18.5 trillion 19.4 trillion 142 150 its not mat level in 2010 should it have used an b) Suppose the Fed's policy was successful in keeping real GDP at its potential level in 2019. State whether each of the following would be higher or lower than if the Fed had taken no action: 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: Price Level Year 2018 2019 bills Potential Real GDP $18.5 trillion 19.0 trillion ted to keep real G d them? Real GDP a. Real GDP b. Full-employment real GDP c. The inflation rate d. The unemployment rate $18.5 trillion 19.4 trillion 142 150 its not mat level in 2010 should it have used an b) Suppose the Fed's policy was successful in keeping real GDP at its potential level in 2019. State whether each of the following would be higher or lower than if the Fed had taken no action: 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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