Table 16-1

-Refer to Table 16-1.Consider the hypothetical information in the table above for potential real GDP,real GDP,and the price level in 2016 and in 2017 if Congress and the president do not use fiscal policy.If Congress and the president want to keep real GDP at its potential level in 2017,they should

Question

Table 16-1
 
-Refer to Table 16-1.Consider the hypothetical information in the table above for potential real GDP,real GDP,and the price level in 2016 and in 2017 if Congress and the president do not use fiscal policy.If Congress and the president want to keep real GDP at its potential level in 2017,they should

Quizplus · Accepted Answer

If Congress and the president want to keep real GDP at its potential level in 2017, they should decrease income taxes. This will increase disposable income and aggregate demand, which will lead to an increase in real GDP.

Table 16-1 -Refer to Table 16-1.Consider the Hypothetical Information in the Table