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Refer to Table 26-3. Consider the hypothetical information in the table for potential real GDP, real GDP, and the price level in 2018 and
Refer to Table 26-3. Consider the hypothetical information in the table for potential real GDP, real GDP, and the price level in 2018 and in 2019 if the Federal Reserve does not use monetary policy. If the Fed uses monetary policy successfully to keep real GDP at its potential level in 2019, which of the following will be lower than if the Fed had taken no action? Table 26-3 Year Potential Real GDP $18.0 2018 trillion 2019 trillion 18.5 Real GDP $18.0 trillion trillion 18.8 a) real GDP and the unemployment rate b) real GDP and the inflation rate c) real GDP and potential GDP d) potential GDP and the inflation rate Price Level 150 154
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