Suppose the Following Table Illustrates the Values of Real and Potential

question 69

Essay

Suppose the following table illustrates the values of real and potential GDP and the price level,if the Reserve Bank of Australia (RBA)does not change their current policy to be more contractionary or expansionary.Suppose that the RBA uses an appropriate policy and is successful in keeping real GDP at its potential level in 2018.
$$\begin{array} { | c | c | c | c | } \hline \text { Year } & \begin{array} { c } \text { Potential GDP } \\\text { (dollars) }\end{array} & \text { Real GDP (dollars) } & \text { Price level } \\\hline 2017 & 1.44 \text { trillion } & 1.44 \text { trillion } & 144 \\\hline 2018 & 1.47 \text { trillion } & 1.45 \text { trillion } & 146 \\\hline\end{array}$$ State whether each of the following will be higher or lower than if the RBA had taken no action:
a.Real GDP
b.Potential GDP
c.The price level
d.The unemployment rate
_____________________________________________________________________________________________
_____________________________________________________________________________________________

---

Definitions:

Autoregulation

Maintenance of a relatively constant blood flow through a tissue despite relatively large changes in blood pressure; maintenance of a relatively constant glomerular filtration rate despite relatively large changes in blood pressure.

Afferent Arterioles

Small blood vessels that carry blood toward the glomeruli of the kidney, playing a key role in the regulation of blood pressure.

ADH

Antidiuretic hormone, also known as vasopressin, which helps regulate water balance in the body by controlling the amount of water reabsorbed by the kidneys.

Alcohol

An organic compound characterized by one or more hydroxyl (-OH) groups attached to a carbon atom.