You invest an amount today for four years that pays 6% annually. The bank compounds annually. At the end of the four years you will have $150. What amount must you invest today?

Monetary & Fiscal policy

What will be an ideal response?

Refer to Table 26-4. Suppose the following table illustrates the values of real and potential GDP and the price level if the Fed does not vote to change their current policy to be more contractionary or expansionary

If the Fed wants to keep real GDP at its potential level in 2017, should the Fed use a contractionary or expansionary policy? How should it conduct open market operations to achieve its goal?