The graph shows the aggregate demand curve and the short-run aggregate supply curve in Artica Potential GDP i Intialy $300 Bilion. A drought decreases potential GDP to 1250 bilon. Draw the new Potenal GDP Ine. Label it. Draw a curve to show what happens if the central bank lowers the federal funds rate. Label the curve. Draw a point at the new equilbrum price level and real GOP Label 1. Now starting trom the original equibrium, draw a curve to show what happens if the central bank raises the federal unds rate Label the curve. Drawa point at the hew equilbrium price level and real GOP, Label it 2. To retum the economy to polental GOP, he central bank should _________ the federal tunde rate O A. Raise O B. lower
The graph shows the aggregate demand curve and the short-run
A drought decreases potential GDP to 1250 bilon.
Draw the new Potenal GDP Ine. Label it.
Draw a curve to show what happens if the central bank lowers the federal funds rate. Label the curve.
Draw a point at the new equilbrum price level and real GOP Label 1.
Now starting trom the original equibrium, draw a curve to show what happens if the central bank raises the federal unds rate Label the curve.
Drawa point at the hew equilbrium price level and real GOP, Label it 2.
To retum the economy to polental GOP, he central bank should _________ the federal tunde rate
O A. Raise
O B. lower
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