Refer to Table 17.1 for the following question.
Table 17.1
$$\begin{array} { | c | c | c | c | }
\hline \text { Year } & \text { Potential GDP } & \text { Real GDP } & \text { Price Level } \
\hline 2016 & \$ 1.5 \text { trillion } & \$ 1.5 \text { trillion } & 150 \
\hline 2017 & \$ 1.6 \text { trillion } & \$ 1.52 \text { trillion } & 152 \
\hline
\end{array}$$
-Refer to Table 17.1.Consider the hypothetical information in the table for potential GDP,real GDP and the price level in 2016 and in 2017 if the Reserve Bank of Australia does not use monetary policy.If the Reserve Bank of Australia wants to keep real GDP at its potential level in 2017,it should

Question

Refer to Table 17.1 for the following question.
Table 17.1
 $$\begin{array} { | c | c | c | c | } 
\hline \text { Year } & \text { Potential GDP } & \text { Real GDP } & \text { Price Level } \
\hline 2016 & \$ 1.5 \text { trillion } & \$ 1.5 \text { trillion } & 150 \
\hline 2017 & \$ 1.6 \text { trillion } & \$ 1.52 \text { trillion } & 152 \
\hline
\end{array}$$
-Refer to Table 17.1.Consider the hypothetical information in the table for potential GDP,real GDP and the price level in 2016 and in 2017 if the Reserve Bank of Australia does not use monetary policy.If the Reserve Bank of Australia wants to keep real GDP at its potential level in 2017,it should

Quizplus · Accepted Answer

To increase real GDP to its potential level, the Reserve Bank of Australia should buy government securities, which increases the money supply and lowers interest rates, stimulating economic activity.

Refer to Table 17 -Refer to Table 17