Table 27-2 -Refer to Table 27-2

question 277

Multiple Choice

Table 27-2
$$\begin{array} { | c | c | c | c | } \hline \text { Year } & \text { Potential Real GDP } & \text { Real GDP } & \text { Price Level } \\\hline 2016 & \$ 18.0 \text { trillion } & \$ 18.0 \text { trillion } & 150 \\\hline 2017 & 18.5 \text { trillion } & 18.8 \text { trillion } & 154 \\\hline\end{array}$$
-Refer to Table 27-2.Consider the hypothetical information in the table above for potential real GDP,real GDP,and the price level in 2016 and in 2017 if Congress and the president do not use fiscal policy.If Congress and the president want to keep real GDP at its potential level in 2017,they should

• A)buy Treasury securities.
• B)conduct expansionary fiscal policy.
• C)decrease government purchases.
• D)decrease the discount rate.

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Definitions:

Immigration

The action of coming to live permanently in a foreign country.

Foreign Tourists

Visitors from other countries who travel to a different country for leisure, business, or other purposes, contributing to the host country's economy.

Merchandise Trade Imbalance

A discrepancy between a country's exports and imports of tangible goods, leading to either a trade surplus or deficit.

Overall Trade Imbalance

The difference between a country's total exports and total imports over a certain period, indicating whether a country is in a trade surplus or deficit.