Question: 7. A. How might an analyst use the data reflected below to confirm her suspicion that Brazil is currently experiencing an output gap? B. Given

7. A. How might an analyst use the data reflected below to confirm her suspicion that Brazil is currently experiencing an output gap?

B. Given your response in Part A, would you expect inflation over the next year to accelerate or decline?

Variable 3/31/2002 3/31/2003 3/31/2004 GDP (index) 129.0 128.5 128.0 Unemployment rate 10.5% 11.0% 11.5%

Capacity utilization rate 80.5% 80.0% 80.0%

Inflation rate 9.0% 8.5% 7.0%

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