Table 17-3 -Refer to Table 17-3

question 170

Multiple Choice

Table 17-3
$\begin{array}{|c|l|l|c|}\hline \text { Year } & \text { Potential Real GDP } & \text { Real GDP } & \text { Price Level } \\\hline 2018 & \$ 18.0 \text { trillion } & \$ 18.0 \text { trillion } & 150 \\\hline 2019 & 18.5 \text { trillion } & 18.8 \text { trillion } & 154 \\\hline\end{array}$
-Refer to Table 17-3.Consider the hypothetical information in the table above for potential real GDP,real GDP,and the price level in 2018 and in 2019 if the Federal Reserve does not use monetary policy.If the Fed wants to keep real GDP at its potential level in 2019,it should

• A) buy Treasury securities.
• B) sell Treasury securities.
• C) decrease the required reserve ratio.
• D) decrease income taxes.

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Definitions:

Main-Purpose Rule

A principle in suretyship law that a guarantor's promise to pay another's debt is not considered a secondary promise requiring a written agreement if the guarantor's main purpose benefits them.

Parol Evidence Rule

A legal rule in contract law that prevents the admission of external evidence intended to alter or contradict the terms of a written agreement.

Merger Clause

A clause in a written agreement within the statute of frauds which states that the written agreement accurately reflects the final, complete version of the agreement.

Parol Evidence Rule

A legal doctrine stating that oral or extrinsic evidence cannot be used to contradict, vary, or add to the terms of a written contract.