If the economy is producing an equilibrium real output that is less than potential output, a(n):

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The question asks: If the economy is producing an equilibrium real output that is less than potential output, a(n):

Option 1: 'contractionary monetary policy could be used to decrease aggregate demand and decrease the general price level.' This would further reduce aggregate demand, which is counterproductive when output is already below potential. In a recessionary gap, contractionary policy tightens conditions, lowering demand and typically the price level, worsening unemployment rather than helping return to potential.

Option 2: 'expansionary monetary policy could be used to decrease aggregate demand and decrease the general price level.' This is internally inconsistent: expansionary policy aims to raise, not decrease, aggregate demand. Decreasing AD would not help close a recessionary gap, and the stated outcome (lower price level) would also be unlikely under expansionary policy which tends to raise prices or at least not push them down.

Option 3: 'expansionary monetary policy could be used to increase aggregate demand and increase the general price level.' This aligns with standard macroeconomic reasoning: when output is below potential, policymakers typically use expansionary monetary policy (e.g., lower interest rates, asset purchases) to shift AD right, boosting real output toward potential and often pushing the price level up as demand strengthens. The combination of higher AD and a higher price level is consistent with closing a recessionary gap in the short run.

Option 4: 'contractionary monetary policy could be used to increase aggregate demand and increase the general price level.' Contractionary policy reduces aggregate demand, not increases it, so this option contains a clear contradiction. It also mismatches the goal of raising output when operating below potential.

In sum, only Option 3 correctly identifies both the policy direction (expansionary) and the anticipated effects (higher AD and a higher price level) appropriate for an economy with output below potential.

If the economy is producing an equilibrium real output that is less than potential output, a(n):

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If the economy is producing an equilibrium real output that is less than potential output, a(n):

查看解析

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类似问题

Which of the following agencies has primary responsibility for setting monetary policy and regulating the banking system?

Why is psychology important in a country’s monetary policy?

The RBA can stimulate the economy by _____, all of which shifts the aggregate demand to the _____.

If the cash rate is increased, the RBA is trying to:

Select the option that correctly shows all the missing words in the following sentence.Monetary policy is the management of ________ by changing money _______ for the purpose of adjusting aggregate _____.

Which of the following is NOT a Monetary policy tool available to the FED?

According to the graph, contractionary monetary policy will cause an economy that is initially at full-employment output to go from equilibrium _______ to equilibrium ________ in the short run.

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论文查重助手

文献引用助手

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The RBA can stimulate the economy by _, all of which shifts the aggregate demand to the _.

Select the option that correctly shows all the missing words in the following sentence.Monetary policy is the management of ____ by changing money _ for the purpose of adjusting aggregate ___.

According to the graph, contractionary monetary policy will cause an economy that is initially at full-employment output to go from equilibrium _ to equilibrium __ in the short run.