Refer to the Figure Below

question 55

Multiple Choice

Refer to the figure below.Based on the diagram, if potential output equals 5,000 and the real interest rate is 1%, then there is ______ gap and the Fed must ______ the real interest rate so that output will equal potential output.

• A)a recessionary; raise
• B)a recessionary; reduce
• C)an expansionary; reduce
• D)an expansionary; raise

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Definitions:

Artifacts

Physical objects produced or shaped by human craft, especially tools, weapons, or ornaments of historical, archaeological, or cultural interest.

Determine Behavior

The factors or mechanisms that influence or dictate how an individual behaves in various situations.

Tibetan Plateau

An elevated plateau region in Asia, sometimes called the "Roof of the World," known for its high altitudes and significant impact on climate.

Continental Collision

A convergent plate boundary that involves the collision of two masses of continental crust.