a. If the government does not take any policy actions, then, in 2021, the value of real GDP will be $ trillion and the value of the price level will be (Enter your responses rounded to one decimal place.) b. What actions can the government take to bring real GDP to its potential level in 2021? In order to bring real GDP to its potential level in 2021, the government can engage in fiscal policy by either government spending or taxes. c. If the government takes no policy actions, the inflation rate in 2021 will be %. (Enter your response rounded to one decimal place.) If the government uses fiscal policy to keep real GDP at its potential level, the inflation rate in 2021 will be %. (Enter your response rounded to one decimal place.)

a. If the government does not take any policy actions, then, in 2021, the value of real GDP will be $ trillion and the value of the price level will be (Enter your responses rounded to one decimal place.) b. What actions can the government take to bring real GDP to its potential level in 2021? In order to bring real GDP to its potential level in 2021, the government can engage in fiscal policy by either government spending or taxes. c. If the government takes no policy actions, the inflation rate in 2021 will be %. (Enter your response rounded to one decimal place.) If the government uses fiscal policy to keep real GDP at its potential level, the inflation rate in 2021 will be %. (Enter your response rounded to one decimal place.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

a. If the government does not take any policy actions, then, in 2021, the
value of real GDP will be $ trillion and the value of the price level will
be (Enter your responses rounded to one decimal place.)
b. What actions can the government take to bring real GDP to its
potential level in 2021?
In order to bring real GDP to its potential level in 2021, the government
can engage in
fiscal policy by either
government spending or
taxes.
c. If the government takes no policy actions, the inflation rate in 2021
will be%. (Enter your response rounded to one decimal place.)
If the government uses fiscal policy to keep real GDP at its potential
level, the inflation rate in 2021 will be %. (Enter your response
rounded to one decimal place.)

Price, Level
125
123
120
LRAS 2020 LRAS 2021
18.4
SRAS 2020
SRAS 2021
ADb.
2021
AD 2021
AD 2020
$18.0 18.3
Real GDP (trillions of dollars)
[AD] a -- without policy, b -- with policy

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Please dear expert hand written is not allowed.