Figure 1 provides the recent evolution of selected macroecon…

Figure 1 prоvides the recent evоlutiоn of selected mаcroeconomic аggregаtes. Based on our class discussion regarding (i) the importance of distinguishing long-run trend vis-à-vis short-run deviations from trend dynamics; (ii) the current state of the labor market; (iii) the persistent or temporary nature of recent inflation dynamics; and (iv) the level of GDP relative to trend, briefly analyze the current macroeconomic environment using sound economic arguments. To guide your analysis, focus on outlining answers to the following questions (bullet points are perfectly valid): Figure 1: Selected U.S. macroeconomic aggregates (various samples) Table 1: Selected U.S. macroeconomic aggregates (recent evolution) a. Provide an economic assessment of the cyclical nature of U.S. economic activity. In particular, is the economy entering a recession in light of recent/current macroeconomic and political events? Answer yes or no and provide a reason why. Relate your answer to the data of figure 1 and of table 1.On March 18th, 2026, the FOMC decided to keep the federal funds rate unchanged. b.1. Identify the short-run behavior of one variable that would have pressured the Fed to cut rates (i.e., discuss how the values of this variable changed in the recent past to generate that pressure). Answer in two lines or less.b.2. Identify the short-run behavior of one variable that would have pressured the Fed to hold or raise rates (i.e., discuss how the values of this variable changed in the recent past to generate that pressure). Answer in two lines or less.b.3. In your opinion, did the Fed make the correct decision given the current geopolitical conflict in Iran? Argue in favor or against and justify your answer using sound economic reasoning. Answer in 5 lines or less.