Real GDP is __________________ and seems to be __________________ its potential.

Question

Real GDP is __________________ and seems to be __________________ its potential. (rising, falling, or stable) (above, below, equal to) The unemployment rate is __________________ and seems to be __________________ its potential. (rising, falling, or stable) (above, below, equal to) The inflation rate is ______________________. (rising, falling, or stable) Does this seem to be a good state of affairs, or something bad? ________________________. This economy appears to be experiencing ____________________________________________. (recession, demand-pull inflation, stagflation (cost-push inflation), economic growth)

Explanation / Answer

Real GDP is _______rising___________ and seems to be ______below____________ its potential. The unemployment rate is ______falling____________ and seems to be _____above_____________ its potential.

The inflation rate is _________falling_____________. It's a Good state of affairs. Because Unemployment is tending towards NAIRU.

This economy appears to be experiencing. (Let's go with elimination process)

Recession: is not the answer because unemployment is falling.

Demand-pull inflation: is not the answer because inflation is also falling.

Stagflation: is not the answer because inflation is also falling.

Economic growth: is the answer because, unemployment is falling, inflation is coming down and GDP is increasing.

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