I have been stuck on this question! I started it but I\'m not sure if the answer

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I have been stuck on this question! I started it but I'm not sure if the answers are right. I would really appreciate it if you answered all the parts of this question. Thank you so much!

Answer Blanks:

1. $12 trillion, $16 trillion, $20 trillion, $8 trillion, $10 trillion

2. A recessionary gap, an expansionary gap

3. $4 trillion, $5 trillion, $1 trillion, $2 trillion, $3 trillion

4. 145, 135, 140

5. The same as, lower than, higher than

6. Increase, decrease

7. Increase, decrease

8: AD, LRAS, SRAS

9. Left, right

10. Decrease, increase

11. Increase, decrease

12. Increase, decrease

13. AD, LRAS, SRAS

14. Right, left

15. Inflation, unemployment

16. Unemployment, inflation

Consider the following graph. The economy is currently producing at point A (grey star symbol), which corresponds to the intersection of the AD1 and SRAS1 curves. The Federal Reserve ("the Fed") is considering whether to intervene in an effort to bring the economy back to its potential PRICE LEVEL No Intervention 165 160 155 150 145 140 135 130 125 If Fed Intervenes SRAS1 AD AD 12 14 16 13 2ler A 8 10 12 14 16 18 20 22 24 Clear ALL REAL GDP (Trillions of dollars Help Clear All $16 trillion According to the graph, the potential output of this economy is Since real GDP is currently $20 trillion (as shown by point A), this level of potential output means there is currently of $4 trillion an expansionary gap

Explanation / Answer

8) AD

9) Left

10) decrease

11) increase

12) decrease

13) sras

14) left

15) unemployment

16) inflation

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