14) Suppose real GDP is $12.6 trillion and potential GDP is $12.4 trillion. To move the economy back to potential GDP, Congress should A) lower government purchases by more than $200 billion. B) lower government purchases by $200 billion. C) lower government purchases by an amount less than $200 billion D) lower taxes by $200 billion. E) raise taxes by an amount more than $200 billion.

14) Suppose real GDP is $12.6 trillion and potential GDP is $12.4 trillion. To move the economy back to potential GDP, Congress should A) lower government purchases by more than $200 billion. B) lower government purchases by $200 billion. C) lower government purchases by an amount less than $200 billion D) lower taxes by $200 billion. E) raise taxes by an amount more than $200 billion.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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