Consider the following table: Year 2012 2013 Potential GDP $14.9 trillion $15.3 trillion Real GDP $14.9 trillion $15.2 trillion Price Level 110 112 What can we expect from the Federal Reserve Bank if it seeks to move the economy in the direction of long-run macroeconomic equilibrium? OA. The Fed will pursue a contractionary monetary policy. B. The Fed will pursue a contractionary fiscal policy. c. The Fed will pursue an expansionary monetary policy. OD. The Fed will pursue an expansionary fiscal policy. If the Fed's policy is successful, what is the effect on the following indicators? Actual real GDP: Potential real GDP: Price level: Unemployment:
Consider the following table: Year 2012 2013 Potential GDP $14.9 trillion $15.3 trillion Real GDP $14.9 trillion $15.2 trillion Price Level 110 112 What can we expect from the Federal Reserve Bank if it seeks to move the economy in the direction of long-run macroeconomic equilibrium? OA. The Fed will pursue a contractionary monetary policy. B. The Fed will pursue a contractionary fiscal policy. c. The Fed will pursue an expansionary monetary policy. OD. The Fed will pursue an expansionary fiscal policy. If the Fed's policy is successful, what is the effect on the following indicators? Actual real GDP: Potential real GDP: Price level: Unemployment:
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![Consider the following table:
Year
2012
2013
Potential GDP
$14.9 trillion
$15.3 trillion
Real GDP
$14.9 trillion
$15.2 trillion
Price Level
110
112
What can we expect from the Federal Reserve Bank if it seeks to move the economy in the direction of long-run macroeconomic equilibrium?
OA. The Fed will pursue a contractionary monetary policy.
B. The Fed will pursue a contractionary fiscal policy.
c. The Fed will pursue an expansionary monetary policy.
OD. The Fed will pursue an expansionary fiscal policy.
If the Fed's policy is successful, what is the effect on the following indicators?
Actual real GDP:
Potential real GDP:
Price level:
Unemployment:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffeab6596-9b1a-4169-97a7-0efb37e2fcfb%2F512d3fca-7420-4486-bd48-774e6b1e4282%2Fi1wxlk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Consider the following table:
Year
2012
2013
Potential GDP
$14.9 trillion
$15.3 trillion
Real GDP
$14.9 trillion
$15.2 trillion
Price Level
110
112
What can we expect from the Federal Reserve Bank if it seeks to move the economy in the direction of long-run macroeconomic equilibrium?
OA. The Fed will pursue a contractionary monetary policy.
B. The Fed will pursue a contractionary fiscal policy.
c. The Fed will pursue an expansionary monetary policy.
OD. The Fed will pursue an expansionary fiscal policy.
If the Fed's policy is successful, what is the effect on the following indicators?
Actual real GDP:
Potential real GDP:
Price level:
Unemployment:
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