Based on the Diagram, If Potential Output Equals 5,000 and the Real

question 111

Multiple Choice

Based on the diagram, if potential output equals 5,000 and the real interest rate is 5 percent, then there is ________ gap and the Fed must ________ the real interest rate so that output will equal potential output.

• A)a recessionary; raise
• B)a recessionary; reduce
• C)no output; not change
• D)an expansionary; raise

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Definitions:

Less Vulnerable

Being more resistant or less exposed to threats, harm, or other forms of risk.

Preserves Formatting

The maintenance of text layout and visual elements when content is transferred or displayed in different applications or devices.

Ideal Length

This refers to the most suitable or optimal extent or duration of something based on its context or objectives, such as a document, presentation, or video.

Less Than Five Years

The phrase "less than five years" typically refers to a time period or experience duration that is shorter than five years.