Table 17-5 -Refer to Table 17-5

question 145

Essay

Table 17-5
$$\begin{array} { | c | c | c | c | } \hline \text { Year } & \text { Potential Real GDP } & \text { Real GDP } & \text { Price Level } \\\hline 2014 & \$ 14.4 \text { trillion } & \$ 14.4 \text { trillion } & 144 \\\hline 2015 & 14.7 \text { trillion } & 14.5 \text { trillion } & 146 \\\hline\end{array}$$
-Refer to Table 17-5.Suppose the table above illustrates the values of real and potential GDP and the price level,if the Fed does not vote to change their current policy to be more contractionary or expansionary.Suppose that the Fed uses an appropriate policy and is successful in keeping real GDP at potential in 2015.State whether each of the following will be higher or lower than if the Fed had taken no action:
a.Real GDP
b.Potential real GDP
c.The price level
d.The unemployment rate

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