Consider the hypothetical information in the following table for potential GDP,$,$ real GDP,$,$ and the price level in 2018 and in 2019 if the government does not use fiscal policy.

Year	Potential GDP	Real GDP	Price Level
2018	$1.5 trillion	$1.5 trillion	150
2019	$1.7 trillion	$1.6 trillion	153

 $\mathrm{<br>}$

 

If the government wants to keep real GDP at its potential level in 2019, it should _________.$\_\_\_\_\_\_\_\_\_.$

a.

$.$

decrease government purchases

b.$.$

decrease income taxes

c.$.$

increase interest rates

d.$.$

decrease interest rates

Answer rating: 100% (QA)

The detailed answer for the above question is provided below The correct answer is d decrease intere... View the full answer