Eurozone Out of Recession After Economy Grows 2%

The Eurozone economy grew 2 percent in the second quarter of 2021, moving the economy out of recession. Consumer expenditure made a large contribution to the growth of the economies of France, Germany, and Spain. Eurozone real GDP remains down 3 percent from its prepandemic level in 2019.

Source: bbc.com, July 30, 2020

a. Assuming that the Eurozone was at full employment prior to the pandemic, explain its current macroeconomic equilibrium.

b. Draw a diagram to illustrate the state of the Eurozone economy in the second quarter of 2021.