In the following graph, suppose that the economy moves from point A in year 1 to point B in year 2. Using the graph, briefly explain your answer to each of the questions.

a. What is the growth rate in potential GDP from year 1 to year 2?
b. Is the unemployment rate in year 2 higher or lower than in year 1?
c. What is the inflation rate in year 2?
d. What is the growth rate of real GDP in year 2?

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LRAS1 LRAS2 SRAS, Price level (GDP deflator, 2009 = 100) SRAS2 114 112 AD2 AD, $17.4 17.6 17.8 Real GDP (trillions of 2009 dollars)