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 its 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 2014.
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:
Psychological Sensation
The initial process of detecting and interpreting environmental stimuli through the senses.
Perception
The process of organizing, identifying, and interpreting sensory information to represent and understand the environment around us.
Selection Factor
A source of bias that may occur in research findings when participants are allowed to choose for themselves a certain treatment in a scientific study.
Research Findings
The outcomes, results, or conclusions gathered from investigations and studies conducted on specific topics.
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