2. The Phillips curve in the short run and long run The following graph plots aggregate demand (AD2027) and aggregate supply (AS) for the imaginary country of Iguazu in the year 2027. Suppose the natural level of output in this economy is $6 trillion. On the following graph, use the green line (triangle symbol) to plot the long-run aggregate supply (LRAS) curve for this economy. LRAS Outcome C 0 2 4 6 8 10 12 14 16 108 107 106 105 104 103 102 101 100 PRICE LEVEL OUTPUT (Trillions of dollars) AD A AD B AD 2027 A B AS Economists forecast that if the government takes no action and the economy continues to grow at the current rate, aggregate demand in 2028 will be given by the curve labeled ADA, resulting in the outcome given by point A. If, however, the government pursues an expansionary policy, aggregate demand in 2028 will be given by the curve labeled ADB, resulting in the outcome given by point B. The following table presents projections for the unemployment rates that would occur at point A and point B. Consider the potential rate of inflation between 2027 and 2028, depending on whether the