Refer to Table 17 -Consider the Hypothetical Information in Table 17

question 78

Multiple Choice

Refer to Table 17.2 for the following questions.
Table 17.2
$$\begin{array} { | c | c | c | c | } \hline \text { Year } & \begin{array} { c } \text { Potential GDP } \\\text { (dollars) }\end{array} & \text { Real GDP (dollars) } & \text { Price Level } \\\hline 2016 & 1.5 \text { trillion } & 1.5 \text { trillion } & 150 \\\hline 2017 & 1.6 \text { trillion } & 1.8 \text { trillion } & 156 \\\hline\end{array}$$
-Consider the hypothetical information in Table 17.2 for potential GDP,real GDP and the price level in 2016 and in 2017 if the Reserve Bank of Australia (RBA) does not use monetary policy.If the RBA wants to keep real GDP at its potential level in 2017,it should

• A) buy government securities.
• B) sell government securities.
• C) decrease interest rates.
• D) decrease income taxes.

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