Read Chapter 2 of the Economic Report of the President, 1998 from the beginning through the end of the section entitled: "Aggregate Spending in 1997."

Questions

1. What happened to aggregate expenditures in 1997?
2. Examine the changes in C, I, G, and X presented in Table 2-1. Did any of these components of aggregate expenditures decline? If so, which one(s)?
3. Does it appear that the output level at the end of 1997 was equal to, below, or above potential GDP? Explain.