Practise distinguishing equilibrium from full-employment income and calculating inflationary or deflationary gaps from expenditure and injections diagrams.
The diagrams show the performance of an economy using different measures.
If an economy is currently at point X on each diagram, what is the most likely conclusion that can be made based on this evidence?
Prices will increase significantly as the economy grows in the near future.
Supply-side policies would be the best option to encourage economic growth.
The economy is currently experiencing a deflationary gap.
There are shortages of skilled labour throughout the economy.