If the Fed Has a Goal of Stable Real GDP

question 108

Multiple Choice

If the Fed has a goal of stable real GDP and the government announces a tax cut,which of the following would occur?

• A) Money demand would not change,real GDP would not change,the interest rate would decrease,and there would be partial crowding out.
• B) Money demand would not change,real GDP would not change,the interest rate would increase,and there would be complete crowding out.
• C) Money demand would increase,real GDP would not change,the interest rate would increase,and there would be partial crowding out.
• D) Money demand would not change,real GDP would increase,the interest rate would decrease,and there would be complete crowding out.
• E) Money demand would increase,real GDP would not change,the interest rate would decrease,and there would be complete crowding out.

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Definitions:

Whiteness

A social construct pertaining to the cultural, historical, and social advantages associated with being white.

American-Indian-Controlled School

Educational institutions that are governed and managed primarily by members of Native American communities, focusing on the preservation and teaching of indigenous knowledge and culture.

Navajo Reservation

A territory established for the Navajo Nation, which is the largest land area retained by an indigenous tribe in the United States.

NAACP

The National Association for the Advancement of Colored People, a civil rights organization founded in 1909 to fight for racial equality in the United States.