Tutorial 10.docx - ECON100 LYDIA A/P DAVID RAJA 6180942...

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ECON100 LYDIA A/P DAVID RAJA 6180942 Tutorial 10 Question 2 1. If the Federal government does not take any policy actions, what will be the values of real GDP and the price level in 2017? If the Federal government does not take any policy actions, the values of real GDP and the price level in 2017 will be 1,600 and the price level will be $114.20 as shown in AD (without policy). 2. What actions can the government take to bring real GDP to its potential level in 2017? The government can take some actions like increasing government purchases or decreasing taxes to bring real GDP to its potential level in 2017. By doing so, the AD
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