Actual GDP in a country is estimated to be 10 percent below potential GDP. Prices are virtually unchanged from one year ago. Unemployment is 12 percent of the civilian work force, much higher than it has been in many years. Which of the following policies (whether monetary or fiscal) would be appropriate for improving these economic conditions? (select as many as apply) increases in reserve requirements on deposits at commercial banks to protect depositors decreases in interest rates by the central bank lower corporate and personal income taxes reductions in the federal debt

Actual GDP in a country is estimated to be 10 percent below potential GDP. Prices are virtually unchanged from one year ago. Unemployment is 12 percent of the civilian work force, much higher than it has been in many years. Which of the following policies (whether monetary or fiscal) would be appropriate for improving these economic conditions? (select as many as apply) increases in reserve requirements on deposits at commercial banks to protect depositors decreases in interest rates by the central bank lower corporate and personal income taxes reductions in the federal debt

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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