If the Economy Is at Potential GDP and the Fed

question 222

Multiple Choice

If the economy is at potential GDP and the Fed increases the quantity of money, then

• A) potential GDP rises.
• B) real GDP rises temporarily above potential GDP.
• C) real GDP rises permanently above potential GDP.
• D) potential GDP and real GDP both decrease.

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Definitions:

Alternative Hypotheses

Hypotheses that suggest there is a statistically significant effect, relationship, or difference between two or more variables in a population.

Hypothesis Test

A statistical method used to determine the probability that a hypothesis regarding a specific characteristic of a population is true.

P-value

The p-value is a measure in statistics that helps determine the significance of results, indicating the probability of observing the given results, or more extreme, by chance if a null hypothesis were true.

Democratic Candidate

An individual running for political office who is a member of or endorsed by the Democratic Party.