Table 26-4 -Refer to Table 26-4. Suppose the Following Table Illustrates the Following

Essay

Table 26-4

-Refer to Table 26-4. Suppose the following table illustrates the values of real and potential GDP and the price level, if the Fed does not vote to change their current policy to be more contractionary or expansionary. If the Fed wants to keep real GDP at its potential level in 2015, should the Fed use a contractionary or expansionary policy? How should it conduct open market operations to achieve its goal?