Table 15-3 -Refer to Table 15-3.Consider the Hypothetical Information in the Table

question 40

Multiple Choice

Table 15-3

-Refer to Table 15-3.Consider the hypothetical information in the table above for potential real GDP,real GDP and the price level in 2014 and in 2015 if the Federal Reserve does not use monetary policy.If the Fed wants to keep real GDP at its potential level in 2015,it should

• A)buy Treasury securities.
• B)sell Treasury securities.
• C)decrease the required reserve ratio.
• D)decrease income taxes.

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Definitions:

Subtreasury Plan

A proposal in the late 19th century aiming to revolutionize credit and storage for agricultural products to benefit farmers.

Farmers' Alliances

Late 19th-century movements in the United States that aimed to improve the economic conditions for farmers through the creation of cooperatives and political advocacy.

Stored Crops

Refers to harvested agricultural products that are kept in storage, usually to ensure food supply stability or for selling when market conditions are favorable.

Populist Party

A political party in the United States in the late 19th century that sought to represent the interests of farmers and laborers.