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2. The following figure depicts the economy of Atlas, which is presently in equilibrium. Potential GDP AS Price level AD O 100 200 300 400
2. The following figure depicts the economy of Atlas, which is presently in equilibrium. Potential GDP AS Price level AD O 100 200 300 400 500 600 700 Real GDP a) Is there an inflationary or a recessionary gap in this economy? What is the size of its gap? b) What is the size of its gap as a percentage of its actual GDP? c) If the natural rate of unemployment is 5 percent, using Okun's Law, calculate the amount of unemployment in Atlas
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