LRAS Price level AS AS AD AD Real GDP per year 34) Refer to the figure above. If
ID: 377400 • Letter: L
Question
LRAS Price level AS AS AD AD Real GDP per year 34) Refer to the figure above. If the econom y is at point b, to close the output gap the Federal Reserve can a) decrease the reserve requirement, decrease the discount rate and/or sell U.S. bonds b) decrease the reserve requirement, increase the discount rate and/or sell U.S. bonds c) decrease the reserve requirement, decrease the discount rate and/or buy U.S. bonds d) ncrease the reserve requirem ent, increase the discount rate and/or sell U.s. bonds. e) increase the reserve requirement, increase the discount rate and/or buy U.S. bonds. 35) Refer to the figure above. If the econom y is at point b a) Actual GDP=Yr and potential GDP=Yb b) Actual GDP Yb and potential GDP-Yb c) Actual GDP=Yb and potential GDP=Yf d) Actual GDP=Yb and potential GDP cannot be determined 36) Refer to the figure above. If the econom y is at point c, to close the output gap the U.S. Congress can a) b) c) d) e) increase taxes, increase transfer paym ents and/or increase government purchases increase taxes, decrease transfer payments and/or decrease government purchases decrease taxes, decrease transfer payments and/or increase government purchases decrease taxes, increase transfer payments and/or increase government purchases increase taxes, increase transfer payments and/or decrease government purchases. 37) Refer to the figure above. The successful use of expansionary policy in this economy will result in a) An increase in the price level, decrease in real GDP, and an increase in unemployment b) An increase in the price level, increase in real GDP, and a decrease in unemployment c) A decrease in the price level, decrease in real GDP, and a decrease in unemployment. d) A decrease in the price level, decrease in real GDP, and an increase in unem ployment e) An increase in the price level, decrease in real GDP, and a decrease in unemploymentExplanation / Answer
Que 34
Answer should be
a) Decrease the reserve requirement, decrease the discount rate and/or sell US bonds.
Que 35
Answer should be
D) Actual GDP = Yb and potential GDP cannot be determined
Que 36
Answer should be
D) Decrease taxes, increase transfer payments and/or increase government purchases.
Que 37
Answer should be
B) An increase in the price level, increase in real GDP and a decrease in unemployment
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