Consider the following table: Year 2012 2013 Potential GDP $14.7 trillion $15.3 trillion Real GDP $14.7...

 

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Consider the following table: Year 2012 2013 Potential GDP $14.7 trillion $15.3 trillion Real GDP $14.7 trillion $15.4 trillion Actual real GDP: Potential real GDP: Price level: Unemployment: What can we expect from the Federal Reserve Bank if it seeks to move the economy in the direction of long-run macroeconomic equilibrium? A. The Fed will pursue a contractionary fiscal policy. B. The Fed will pursue an expansionary monetary policy. C. The Fed will pursue a contractionary monetary policy. D. The Fed will pursue an expansionary fiscal policy. If the Fed's policy is successful, what is the effect on the following indicators? Price Level 110 114 Consider the following table: Year 2012 2013 Potential GDP $14.7 trillion $15.3 trillion Real GDP $14.7 trillion $15.4 trillion Actual real GDP: Potential real GDP: Price level: Unemployment: What can we expect from the Federal Reserve Bank if it seeks to move the economy in the direction of long-run macroeconomic equilibrium? A. The Fed will pursue a contractionary fiscal policy. B. The Fed will pursue an expansionary monetary policy. C. The Fed will pursue a contractionary monetary policy. D. The Fed will pursue an expansionary fiscal policy. If the Fed's policy is successful, what is the effect on the following indicators? Price Level 110 114

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In the given table we can see that the potential GDP increased from 147 trillion in 2012 to 153 tril... View the full answer