1) Examine the schedules for Output (Real GDP), Consumption, Investment, Net Exports and Government Expenditure contained in the table below. Real GDP Consumption Investment Net Exports Gov't Expenditure 1000 800 500 100 80 1500 1200 500 100 90 2000 1600 500 100 110 2500 2000 500 100 130 3160 2400 500 100 160 3750 2800 500 100 210 4280 3200 500 100 260 a) If the natural (potential) GDP is 4980 state whether a deflationary/recessionary gap or an inflationary gap exists. If a gap exists calculate the size of the gap. b) Explain carefully what happens to i) Production; and ii) Inventories