Question

"contractionary monetary policy to prevent real gdp from rising above potential real gdp would cause the inflation rate to be​ ________ and real gdp to be​ ________."

Answer 1

Lowering the amount of money put into circulation overall (as is the rationale for contractionary monetary policy) leads to inflation decreasing and real GDP to do the same. Having a lesser amount of money in circulation leads to a lesser value for that money when calculating how much purchasing power that money is going to have.