Table 17-4 -Refer to Table 17-4

question 50

Essay

Table 17-4
$\begin{array}{|l|l|l|l|}\hline \text { Year } & \text { Potential Real GDP } & {\text { Real GDP }} & \text { Price Level } \\\hline 2018 & \$ 18.1 \text { trillion } & \$ 18.1 \text { trillion } & 150 \\\hline 2019 & 18.4 \text { trillion } & 18.3 \text { trillion } & 153 \\\hline\end{array}$
-Refer to Table 17-4.Suppose the following table 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? How should it conduct open market operations to achieve its goal?

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Definitions:

Studentized Range Statistic

A statistical measure used in significance testing of the difference between the highest and the lowest means in a set, taking into account sample size.

Tukey's Multiple Comparison

A statistical method used to find which means among a set of means differ from the rest after conducting an ANOVA test.

Fisher's LSD

A statistical method used to compare means while controlling for familywise error rate in the context of an ANOVA.

Pooled Variance Estimator

An estimate of variance that combines the variances from two or more samples, assuming that they come from populations with the same variance.