Table 17-6 -Refer to Table 17-6

question 226

Essay

Table 17-6
$\begin{array}{|c|l|l|l|}\hline \text { Year } & \text { Potential Real GDP } & {\text { Real GDP }} & \text { Price Level } \\\hline 2018 & \$ 18.1 \text { trillion } & \$ 18.1 \text { trillion } & 150 \\\hline 2019 & 18.4 \text { trillion } & 18.6 \text { trillion } & 155 \\\hline\end{array}$
-Refer to Table 17-6.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.If the Fed wants to keep real GDP at its potential level in 2019,should the Fed use a contractionary or expansionary policy? Should it raise or lower its interest rate target? How should it conduct open market operations to achieve its goal?

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Definitions:

Conventional

Adhering to accepted standards and practices; typical or traditional in nature.

Post-Conventional

A stage of moral development in which the individual's sense of morality is defined in terms of more abstract principles and values that apply to all situations and societies.

Hospice Care

Specialized care designed to provide comfort and support to patients and their families during the end stages of a terminal illness.

Terminal Illnesses

Conditions that are considered incurable and are likely to lead to death.