Author Question: Refer to Table 27-4. Consider the hypothetical information in the table above for potential real ... (Read 26 times)

karateprodigy · **on:** Jun 29, 2018

Refer to Table 27-4. 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 use fiscal policy successfully to keep real GDP at its potential level in 2017, which of the following will be lower than if Congress and the president had taken no action?
A) potential GDP and the inflation rate B) real GDP and the unemployment rate
C) real GDP and potential GDP D) real GDP and the inflation rate

Question 2

Equilibrium GDP is equal to

A) autonomous expenditure times the multiplier.
B) autonomous expenditure times the marginal propensity to consume.
C) autonomous expenditure times the marginal propensity to save.
D) autonomous expenditure.