Point E1 from the pictures represent what a. The potential GDP b.  inflammatory gap c. Deflationary gap d. Recession 

Give two examples of goods or services that you have seen inflate dramatically and also deflate dramatically over the past few years.

1. Explain with your own words the definition of Gross Domestic Product. 2. How does the growth rate of real GDP contribute to an improved standard of living? 3. Use the following data to answer the question. The table lists some macroeconomic data for the United States in 2008. Item                                                    Billions of dollars Wages paid to labor                   8,000Consumption expenditure    10,000Net operating surplus               3,200Investment                                       2,000Government expenditure        2,800Net exports                                    –700Depreciation                                   1,800 3a) Calculate U.S. GDP in 2008.

How does the decline in real personal income compare today with prior recessions?