If the Fed Has a Goal of Stable Real GDP

question 108

Multiple Choice

If the Fed has a goal of stable real GDP and the government announces a tax cut,which of the following would occur?

• A) Money demand would not change,real GDP would not change,the interest rate would decrease,and there would be partial crowding out.
• B) Money demand would not change,real GDP would not change,the interest rate would increase,and there would be complete crowding out.
• C) Money demand would increase,real GDP would not change,the interest rate would increase,and there would be partial crowding out.
• D) Money demand would not change,real GDP would increase,the interest rate would decrease,and there would be complete crowding out.
• E) Money demand would increase,real GDP would not change,the interest rate would decrease,and there would be complete crowding out.

---

Definitions:

RAW Files

Unprocessed image files captured by a digital camera, retaining all the details and allowing for more flexibility in editing compared to compressed formats.

JPEG Files

A format for compressing image files, widely used for storing and transmitting photographs on the web.

Intellectual Property

Legal rights that result from intellectual activity in the industrial, scientific, literary, and artistic fields.

Physical Music CD

A compact disc used to store music recordings that can be played on digital audio players, computers, or stereo systems.