Consider the Hypothetical Information in the Following Table for Potential

question 121

Multiple Choice

Consider the hypothetical information in the following table for potential GDP,real GDP,and the price level in 2017 and in 2018 if the government does not use fiscal policy. $$\begin{array} { | c | c | c | c | } \hline \text { Year } & \text { Potential GDP } & \text { Real GDP } & \text { Price Level } \\\hline 2017 & \$ 1.5 \text { trillion } & \$ 1.5 \text { trillion } & 150 \\\hline 2018 & \$ 1.7 \text { trillion } & \$ 1.6 \text { trillion } & 152 \\\hline\end{array}$$ If the government wants to keep real GDP at its potential level in 2014,it should _________.

• A) decrease income taxes
• B) decrease government purchases
• C) decrease interest rates
• D) increase interest rates

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Definitions:

Sigmund Freud

An Austrian neurologist known as the founding father of psychoanalysis, a method for treating psychological pathology by means of dialogue between the patient and a psychoanalyst.

Stages of Sleep

The progression through different phases of sleep characterized by unique brain wave activity, eye movements, and muscle tension, including REM and non-REM (NREM) stages.

Dreams

A series of thoughts, images, and sensations occurring in a person's mind during sleep, often reflecting unconscious desires or concerns.

One-Fifth

A fraction equivalent to 20 percent of a whole.