Table 16-3 -Refer to Table 16-3.Consider the Hypothetical Information in the Table

question 278

Multiple Choice

Table 16-3

-Refer to Table 16-3.Consider the hypothetical information in the table above for potential real GDP,real GDP,and the price level in 2018 and in 2019 if Congress and the president do not use fiscal policy.If Congress and the president use fiscal policy successfully to keep real GDP at its potential level in 2019,which of the following will be higher than if Congress and the president had taken no action?

• A)real GDP and the unemployment rate
• B)real GDP and the inflation rate
• C)real GDP and potential GDP
• D)potential GDP and the inflation rate

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Definitions:

Present Value

The value today of a future sum of money or series of cash payments, considering a particular interest rate.

Quarterly Withdrawal

A financial term referring to the amount of money withdrawn from an account every three months.

Compounded Monthly

The process of calculating interest where the accrued interest is added to the principal sum each month, resulting in interest earned on interest.

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