Table 12.5 -Refer to Table 12.5.Consider the Hypothetical Information in the Table

question 189

Multiple Choice

Table 12.5
-Refer to Table 12.5.Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2017 and in 2018 if the federal government does not use fiscal policy.If the federal government uses fiscal policy successfully to keep real GDP at its potential level in 2018, which of the following will be lower than if the federal government 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
• E)interest rates and the participation rate

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