Table 26-5 -Refer to Table 26-5

question 51

Essay

Table 26-5
$$\begin{array} { | c | l | l | c | } \hline \text { Year } & \text { Potential Real GDP } & \text { Real GDP } & \text { Price Level } \\\hline 2016 & \$ 18.4 \text { trillion } & \$ 18.4 \text { trillion } & 144 \\\hline 2017 & 18.7 \text { trillion } & 18.5 \text { trillion } & 146 \\\hline\end{array}$$
-Refer to Table 26-5.Suppose the table above illustrates the values of real and potential GDP and the price level if the Fed does not vote to change their current policy to be more contractionary or expansionary.Suppose that the Fed uses an appropriate policy and is successful in keeping real GDP at potential in 2017.State whether each of the following will be higher or lower than if the Fed had taken no action:
a.Real GDP
b.Potential real GDP
c.The price level
d.The unemployment rate

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Definitions:

Market

A place or system where buyers and sellers interact to trade goods, services, or securities.

Inventory Item

A product or goods held by a company for the purpose of sale or production in the normal course of business.

Inventory Turnover

Inventory turnover is a ratio that measures how many times a company's inventory is sold and replaced over a specific period, indicating efficiency in inventory management.

Average Daily Cost

The total cost associated with a process or product divided by the number of days in the period being considered.