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Suppose that the economy is currently operating at full employment as depicted in the graph to the right.Using the line drawing tool​, show the effect on the economy if it were to run a federal budget surplus due to contractionary fiscal policy. Properly label this line.Carefully follow the instructions​ above, and only draw the required objects.​Thus, in the​ short-run the economy will experienceA.arecessionarygap.B.aninflationarygap.Your answer is not correct.C.inflation.D.lowerunemployment.

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The computation of the average annual growth rate of real GDPA.involves simply averaging the growth rate for each​ year, but only if data for many years are available.B.is more complex when examining data for a long period of time than when examining data for only a few years.C.is the same for shorter periods of time as for longer periods of time.D.involves computing the percentage change in real GDP between the first year and the last year for the period being examined.

The difference between the nominal interest rate and the real interest rate isA.the nominal interest rate is the stated interest rate whereas the real interest rate is the nominal interest rate plus the inflation rate.B.the nominal interest rate is the stated interest rate whereas the real interest rate is the nominal interest rate divided by the inflation rate.C.the nominal interest rate is the stated interest rate whereas the real interest rate is the nominal interest rate minus the inflation rate.D.the real interest rate is the stated interest rate whereas the nominal interest rate is the real interest rate minus the inflation rate.

An article in the Economist states that​ "the appeal of GDP is that it​ offers, or seems​ to, a summary statistic of how well an economy is​ doing."​Source:​ "The Euro-Area​ Economy: Speeding​ Up," Economist​, May​ 6, 2017.In what sense does GDP offer a summary statistic of how well an economy is​ doing?A.GDP can measure happiness among citizens—that ​is, the more goods an economy​ produces, the happier its people are—thus indicating​ well-being.B.Since GDP accounts for​ crime, pollution, and other social​ problems, it can be used as a rough measure of​ well-being.C.Since GDP measures how much an economy produces during a period of​ time, it may also indicate​ well-being.D.GDP is able to provide a summary of the goods and services consumed by a typical​ person, thus indicating​ well-being.

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