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3.4 Use the graph to answer the following questions. a. If the government takes no policy actions, what will be the values of real GDP
3.4 Use the graph to answer the following questions. a. If the government takes no policy actions, what will be the values of real GDP and the price level in 2023? b. What actions can the government take to bring real GDP to its potential level in 2023? c. If the government takes no policy actions, what will the inflation rate be in 2023? If the government uses fiscal policy to keep real GDP at its potential level, what will the inflation rate be in 2023? Price level LRAS2022 LRAS2023 (GDP deflator, 2012 = 100) SRAS2022 SRAS2023 125 123 ...... AD2023 (with policy) 120 AD 2023 (without policy)Price level LRAS2022 LRAS 2023 (GDP deflator, SRAS2022 2012 = 100) SRAS 2023 125 .... 123 . . .. ..... AD2023 (with policy) 120 -. .. . AD 2023 (without policy) AD2022 0 $20.1 20.4 20.5 Real GDP (trillions of 2012 dollars)7.8 [Related to the Apply the Concept: \"Will President Trump's Fiscal Policy Raise the Rate of Economic Growth?\"] In 2019, a columnist for the Wall Street journal observed, \"You can boost economic growth in the short-run by juicing demand, such as with tax cuts or spending increases. But you can only sustain faster growth in the long-run with more workers producing goods and services more efficiently.\" a. Briey explain whether you agree with the columnist's reasoning. b. What policies might increase worker productivity in the long run
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