The economy is in short -run macroeconomic equilibrium at po…

The economy is in short -run macroeconomic equilibrium at point E1 in the accompanying diagram. Based on the diagram, answer the following questions. Untitled.png a. Is the economy facing an ‘inflationary’ or a ‘recessionary’ gap? [BLANK-1] gap b. What policies can the government implement that might bring the economy back to long -run macroeconomic equilibrium? (type increase or decrease) Taxes [BLANK-2] Government Spending [BLANK-3] Money Transfers [BLANK-4]

The accompanying table contains the values of two price inde…

The accompanying table contains the values of two price indexes for the years 2004, 2005, and 2006: the GDP deflator and the CPI. For each price index, calculate the inflation rate from 2004 to 2005 and from 2005 to 2006. (Two decimal places for all answers) Untitled.png CPI: 2004-2005: [BLANK-1]% 2005-2006: [BLANK-2]% GDP Deflator: 2004-2005: [BLANK-3]% 2005-2006: [BLANK-4]%