Table 17-1 -Refer to Table 17-1

question 172

Multiple Choice

Table 17-1
$\begin{array}{|c|c|c|c|}\hline \text { Year } & \text { Potential Real GDP } & \text { Real GDP } & \text { Price Level } \\\hline 2018 & \$ 18.2 \text { trillion } & \$ 18.2 \text { trillion } & 145 \\\hline 2019 & 18.6 \text { trillion } & 18.5 \text { trillion } & 147 \\\hline\end{array}$
-Refer to Table 17-1.The hypothetical information in the table shows what the values for real GDP and the price level will be in 2019 if the Fed does not use monetary policy.Which of the following policies makes sense if the Fed wants to keep real GDP at its potential level in 2019?

• A) The trading desk should sell Treasury securities.
• B) The Fed should lower the target for the federal funds rate.
• C) The Fed should pursue contractionary policy.
• D) The Fed should lower capital gains taxes.

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Definitions:

Self Ownership

The concept that individuals own themselves and have autonomy over their own actions, choices, and bodies.

High Power Distance

A cultural dimension that describes a society’s acceptance of unequal distribution of power among its members, where hierarchy is emphasized.

Federalism

A political system where power is divided between a central government and various regional governments.

Profit-Sharing Plan

A company program that gives employees a share in the profits based on its quarterly or annual earnings.