The following table shows the pattern of real GDP, potential GDP, and the unemployment rate for several years in Cycleland.

a. On a scale diagram, draw the path of real GDP and potential GDP (with time on the horizontal axis).

b. On a separate diagram (below the first one) show the path of the unemployment rate.

c. For which years is it possible to determine the value of the NAIRU?

d. Does the NAIRU change over the 10 -year period? Provide one reason that the NAIRU could increase.

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Real GDP Year (billions of $) Potential GDP (billions of $) Unemploymen Rate (%) 2006 790 740 6.3 2007 800 760 6.5 2008 780 780 6.8 2009 750 800 8.2 2010 765 810 8.4 2011 790 830 8.4 2012 815 850 8.0 2013 845 870 7.5 2014 875 890 7.2 2015 900 900 6.8 2016 930 920 6.7