If the Fed Believes That Real GDP Is Above Potential

question 157

Multiple Choice

If the Fed believes that real GDP is above potential GDP, it will

• A)raise interest rates to shift the AD curve to the left and the IA line downward.
• B)raise interest rates to shift the IA line downward.
• C)raise interest rates to shift the AD curve to the left.
• D)lower interest rates to shift the IA line downward.
• E)lower interest rates to shift the AD curve to the left.

---

Definitions:

Note Disclosures

Refers to additional information provided in a company's financial statements, which helps in understanding the numbers presented and includes details such as accounting policies and future obligations.

AASB 101

The Australian Accounting Standards Board document specifying the presentation of financial statements, providing guidelines for structure and minimum requirements for their content.

Impairment of Assets

A decrease in the recoverable value of an asset below its carrying amount, leading to an adjustment of its valuation on the balance sheet.

Financial Position

The status of the assets, liabilities, and equity of an entity as detailed in the balance sheet, indicating the entity’s economic resources and obligations at a given time.