2A. What is the equation for the macro economy? _________________________________ Next to each of the following excerpts from the 28-29 July 2020 Minutes of the Federal Reserve's Open Market Committee, identify the sector of the economy. Use the letters from the macro equation in 2A. The letters may be used more than once or not at all. Answer any other questions included as well.

__2B___ Real PCE rebounded robustly in May, with particularly strong growth in spending for consumer goods but more moderate gains in expenditures for consumer services. ... recent high-frequency indicators of spending on many consumer servicessuch as restaurant dining, hotel accommodations, and air travel remained very subdued.

__2C___ Federal defense spending continued to rise through June, and nondefense purchases were likely boosted in the second quarter by fiscal policy measures taken in response to the coronavirus. In contrast, state and local purchases looked to have declined markedly, as the pay-rolls of these governments shrank further in June, and nominal state and local construction expenditures de-creased, on net, over April and May.

__2D___Nominal new orders and shipments of nondefense capital goods excluding aircraft increased in May and June, but they remained below their levels at the beginning of the year, while some measures of business sentiment improved. Nominal business spending on nonresidential structures outside of the drilling and mining sector declined further in May, and the number of crude oil and natural gas rigs in operationan indicator of business spending on structures in the drilling and mining sectorcontinued to decrease through late July.

__2E___ The fall in exports was broad based across goods categories, while lower imports of automotive products more than offset higher imports of consumer goods and industrial supplies. Following April's historic plunge, exports and imports of services fell a bit further in May, driven by the continued suspension of most international travel. Preliminary data for June showed some recovery in nominal goods exports and imports. Altogether, the available data suggested that net exports were a significant drag on the rate of change in real GDP in the second quarter.

__2F___ From your reading of these FOMC Minutes (July 2020) would you infer that the U.S. economy was in a recession or recovery? Explain very briefly

2G Which of the following would not be included in GDP?

A. Gasoline purchased for a car (by a consumer) to take a day-trip and get out-of-the house

B. Services performed by hair stylists, auto mechanics, and associates at grocery stores

C. Steel sold to manufacturers of appliances or flour sold to a bakery to make "end of the semester" cupcakes for students finishing exams

D. Goods and services sold to other countries