Question 1
Table 15-4
Refer to Table 15-4. Suppose the following table 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. If the Fed wants to keep real GDP at its potential level in 2017, should the Fed use a contractionary or expansionary policy? How should it conduct open market operations to achieve its goal?
Question 2
Table 15-5
Refer to Table 15-5. 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
Real Femur
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