Suppose Real GDP Is $13 Trillion,potential Real GDP Is $13

question 118

Multiple Choice

Suppose real GDP is $13 trillion,potential real GDP is $13.5 trillion,and Congress and the president plan to use fiscal policy to restore the economy to potential real GDP.Assuming a constant price level,Congress and the president would need to decrease taxes by

• A)$500 billion.
• B)less than $500 billion.
• C)more than $500 billion.
• D)None of the above are correct.Congress should raise taxes in this case.

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Definitions:

Impaired

Having reduced function or capability in a physical or cognitive sense.

Major Depressive Disorder

A mental health condition marked by persistent feelings of sadness, hopelessness, and loss of interest, often accompanied by physical symptoms.

Debilitating

Debilitating describes a condition or illness that severely affects one's strength or ability to carry out day-to-day activities.

Hospitalization

The process or period of receiving medical treatment in a hospital.