Suppose Real GDP Is $13 Trillion,potential Real GDP Is $13

question 118

Multiple Choice

Suppose real GDP is $13 trillion,potential real GDP is $13.5 trillion,and Congress and the president plan to use fiscal policy to restore the economy to potential real GDP.Assuming a constant price level,Congress and the president would need to decrease taxes by

• A)$500 billion.
• B)less than $500 billion.
• C)more than $500 billion.
• D)None of the above are correct.Congress should raise taxes in this case.

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Definitions:

Relationship Of Circumstance

Interpersonal relationship that exists because of life circumstances (who your family members are, where you work or study, and so on).

Classmate

A fellow member of the same class in school, college, or any educational institution.

Physical Attractiveness

The perception of an individual's bodily appearance as aesthetically pleasing or appealing, which can influence social opportunities and interpersonal relationships.

Divorce Rates

The statistical measure of the number of divorces that occur within a population during a certain period of time.