If the Fed has a goal of stable real GDP and the government announces a tax cut,which of the following would occur?
A) Money demand would not change,real GDP would not change,the interest rate would decrease,and there would be partial crowding out.
B) Money demand would not change,real GDP would not change,the interest rate would increase,and there would be complete crowding out.
C) Money demand would increase,real GDP would not change,the interest rate would increase,and there would be partial crowding out.
D) Money demand would not change,real GDP would increase,the interest rate would decrease,and there would be complete crowding out.
E) Money demand would increase,real GDP would not change,the interest rate would decrease,and there would be complete crowding out.

Question

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The Answer of If the Fed has a goal of stable real GDP and the government announces a tax cut,which of the following would occur?
A) Money demand would not change,real GDP would not change,the interest rate would decrease,and there would be partial crowding out.
B) Money demand would not change,real GDP would not change,the interest rate would increase,and there would be complete crowding out.
C) Money demand would increase,real GDP would not change,the interest rate would increase,and there would be partial crowding out.
D) Money demand would not change,real GDP would increase,the interest rate would decrease,and there would be complete crowding out.
E) Money demand would increase,real GDP would not change,the interest rate would decrease,and there would be complete crowding out.

If the Fed Has a Goal of Stable Real GDP