Suppose That Initially Real GDP Equals Potential GDP

question 15

Multiple Choice

Suppose that initially real GDP equals potential GDP. Then a decrease in aggregate demand occurs. According to the Taylor rule, the Fed should the federal funds rate by government securities in the open market.

• A) raise; buying
• B) raise; selling
• C) lower; buying
• D) lower; selling

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Definitions:

Sense Of Smell

The ability to perceive odors or scents through the olfactory system.

Known As

Typically used to introduce a term or name by which a person or thing is identified or familiarly recognized.

Posthypnotic Suggestion

A directive given to an individual during hypnosis that is intended to be acted upon after he or she has awakened from the hypnotic state.

Hypnotic State

A state of consciousness involving focused attention, reduced peripheral awareness, and an enhanced capacity for response to suggestion.