Refer to Table 16-1. Consider the hypothetical information in the ...

[cmoore54]

Refer to Table 16-1. 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) decrease government purchases. B) decrease income taxes.
  C) increase the level of interest rates. D) decrease the money supply.

Question 2

Critically evaluate the following statement. Only poor nations face scarcity. Rich nations have everything they need and have therefore conquered scarcity.
 
  What will be an ideal response?

[diesoon]

Answer to Question 1

B

Answer to Question 2

Rich nations simply face different choices than do poor nations. The existence of choices naturally presumes that there is scarcity. Since all resources are limited there is only so many goods and services that can be produced by any nation whether it is poor or rich.

[cmoore54]

Thank you

[diesoon]

Happy to help you