Use the Following to Answer Questions

question 206

Multiple Choice

Use the following to answer questions :
Table: Lemonade and Cookies

-(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2014 is the base year, real GDP in 2014 was:

• A)$400.
• B)$420.
• C)$425.
• D)$445.

---

Definitions:

Federal Reserve

The Federal Reserve is the central banking system of the United States, responsible for monetary policy, regulation of financial institutions, and ensuring stability of the financial system.

Monetary Policy

The process by which a government, central bank, or monetary authority manages the supply of money and interest rates to achieve specific economic objectives.

Fed's Actions

Measures taken by the Federal Reserve to influence the U.S. economy's money supply and interest rates.

Net Exports

Spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports).