Refer to Table 16-2. 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
A) decrease government purchases. B) buy Treasury securities.
C) decrease the discount rate. D) conduct expansionary fiscal policy.
A
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What will be an ideal response?
Assume that a country imposes a tariff in order to gain a price advantage on an item. What is the typical response from the exporting country?
a. It accepts the situation, and does nothing about it. b. It seeks greater efficiency in order to offset the tariff. c. It refuses to sell to the country that imposes the tariff. d. It retaliates by imposing tariffs or quotas on items from the other country.