Actual GDP in a country is estimated to be 10 percent above potential GDP. Prices are virtually unchanged from one year ago. Unemployment is 3 percent of the civilian work force, much lower than it has been in many years. Which of the following policies would be the most appropriate for improving these economic conditions? decreases in interest rates by the central bank decreases in reserve requirements on deposits at commercial banks to protect depositors O reductions in the federal debt decreases in corporate and personal income taxes

Actual GDP in a country is estimated to be 10 percent above potential GDP. Prices are virtually unchanged from one year ago. Unemployment is 3 percent of the civilian work force, much lower than it has been in many years. Which of the following policies would be the most appropriate for improving these economic conditions? decreases in interest rates by the central bank decreases in reserve requirements on deposits at commercial banks to protect depositors O reductions in the federal debt decreases in corporate and personal income taxes

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter15: Macroeconomic Policy, Economic Stability, And The Federal Debt

Section: Chapter Questions

Problem 1CQ

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