Table 18-1 -Refer to Table 18-1

question 237

Multiple Choice

Table 18-1
$$\begin{array} { | c | c | c | c | } \hline \text { Year } & \text { Potential Real GDP } & \text { Real GDP } & \text { Price Level } \\\hline 2013 & \$ 14.0 \text { trillion } & \$ 14.0 \text { trillion } & 150 \\\hline 2014 & 14.5 \text { trillion } & 14.2 \text { trillion } & 152 \\\hline\end{array}$$
-Refer to Table 18-1.Consider the hypothetical information in the table above for potential real GDP,real GDP and the price level in 2013 and in 2014 if the Congress and the president do not use fiscal policy.If the Congress and the president want to keep real GDP at its potential level in 2014,they should

• A)decrease income taxes.
• B)decrease government purchases.
• C)decrease the money supply.
• D)increase the level of interest rates.

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Definitions:

Scientific Management

A management theory that analyzes and synthesizes workflows, aiming to improve economic efficiency, especially labor productivity.

Training Costs

The expenses incurred by an organization for the professional development and training of its employees, which can improve skills and performance.

Work Pace

The speed at which work tasks are performed, often a point of negotiation in labor agreements concerning productivity and worker well-being.

Alienation

The feeling of being isolated and disconnected from one’s social surroundings or from one's own work or products of work.