If potential GDP was $270 in 2016 and it grew by 1 percent in 2017, in which phase of the business cycle is the economy? Explain.

An economy produces only fun and food. The table shows the prices and the quantities of fun and food produced in 2016 and 2017. The base year is 2016.

Transcribed Image Text:

GDP data for 2016 Quantity Price $2 Item Fun 40 Food 60 $3 GDP data for 2017 Quantity Price Item Fun 35 $3 Food 65 $2