Table 17-2
$\begin{array}{|c|l|l|l|}
\hline \text { Year } & \text { Potential Real GDP } & {\text { Real GDP }} & \text { Price Level } \
\hline 2018 & \$ 18.0 \text { trillion } & \$ 18.0 \text { trillion } & 150 \
\hline 2019 & 18.5 \text { trillion } & 18.2 \text { trillion } & 152 \
\hline
\end{array}$
-Refer to Table 17-2.Consider the hypothetical information in the table above for potential real GDP,real GDP,and the price level in 2018 and in 2019 if the Federal Reserve does not use monetary policy.If the Fed wants to keep real GDP at its potential level in 2019,it should

Question

Table 17-2
 $\begin{array}{|c|l|l|l|}
\hline \text { Year } & \text { Potential Real GDP } & {\text { Real GDP }} & \text { Price Level } \
\hline 2018 & \$ 18.0 \text { trillion } & \$ 18.0 \text { trillion } & 150 \
\hline 2019 & 18.5 \text { trillion } & 18.2 \text { trillion } & 152 \
\hline
\end{array}$
-Refer to Table 17-2.Consider the hypothetical information in the table above for potential real GDP,real GDP,and the price level in 2018 and in 2019 if the Federal Reserve does not use monetary policy.If the Fed wants to keep real GDP at its potential level in 2019,it should

Quizplus · Accepted Answer

The Fed should buy Treasury securities to increase the money supply and stimulate aggregate demand, which will increase real GDP to its potential level.

Table 17-2 -Refer to Table 17-2