Question: Refer to the table below to answer the following question. Year Potential GDP Real GDP Price Level Year 1 $1.5 trillion $1.5 trillion 150 Year

Refer to the table below to answer the following question. Year Potential GDP Real GDP Price Level Year 1 $1.5 trillion $1.5 trillion 150 Year 2 $1.6 trillion $1.52 trillion 152 Consider the hypothetical information in the table for potential GDP, real GDP and the price level in Year 1 and in Year 2 if the Reserve Bank of Australia does not use monetary policy. If the Reserve Bank of Australia wants to keep real GDP at its potential level in Year 2, it should: O a. increase income taxes. O b. sell bonds O c. increase interest rates. O d. buy bonds
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