Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap.  

The economic growth rate is measured as the

A) amount of real GDP. B) annual percentage change of the population. C) amount of population. D) annual percentage change of real GDP. E) annual percentage change of employment.

If the real interest rate is 7 percent when the nominal interest is 12 rate is percent, the inflation rate is

A) -5 percent. B) 5 percent. C) 19 percent. D) 1.7 percent. E) 7 percent.