q1

14. OUTPUT Perceived potential 1 973 1975 TIM E Consider Figure 1. You are the governor of the RBA in 1975. You believe potential output follows the dotted line after 1973, but in actuality, it follows the line denoted \"True potential output." The current state of the economy is given by the curve \"Actual output.\" Given the information in the figure, you _, because you believe the economy is in a , but your advice instead _.| lower interest rates; recession; accelerates inflation raise interest rates; recession; accelerates inflation keep interest rates the same; boom; accelerates inflation lower interest rates; boom; increases unemployment Not enough information is given. (DQPC'EDI