6. The Phillips curve in the short run and long run In the year 2023, aggregate demand and aggregate supply in the fictional country of Marjan are represented by the curves AD2023 and AS on the following graph. Suppose the natural rate of output in this economy is $7 trillion. On the following graph, use the green line (triangle symbol) to plot the long-run aggregate-supply (LRAS) curve for this economy. 108 A 107 LRAS AS 106 105 Outcome C 104 PRICE LEVEL AD. 2023 103 ADA 102 ADE 101 100 14 16 0 2 4 6 8 10 12 OUTPUT (Trillions of dollars)Economists have forecast that if the government does nothing and the economy.r continues to grow at the cunent rate, aggregate demand in 2024 will be given by the ADA curve. resulting in the outcome illustrated by point A. If the government pursues a contractionarv policv, aggregate demand in 2024 will be given bv the ADB curve, resulting in the outcome illustrated by point B. The following table gives projecljons for the unemployment rates that would occur at point A and point B. Consider what the rate of ination would be between 2023 and 2024. depending on whether the econ omv moves from the initial price level of 102 to the price level at outcome B or the price level at outcome A. Comniete the table by entering the ination rate at each potentiai outcome point. Note: Calculate the ination rate to two decimal points of precision. Unemployment Rate Inflation Rate . 5% B m Based on your answers to the previous questions, use the black line (pius symbol) to draw the shortrun Phiiiips curve (SRPC) for this economy in 2024. ? -+ SRPC A LRPC INFLATION RATE (Percent) 2 3 5 6 7 UNEMPLOYMENT RATE (Percent) The short-run Phillips curve is line: O Representing the tradeoff between unemployment and inflation O At the natural rate of output O At the natural rate of unemploymentThe short-run Phillips curve is V line: 0 Representing the tradeo' between unemployment and ination 0 At the natural rate of output 0 At the natural rate of unemployment Now consider the long-run effects of this policy. Suppose, in particular, that following implementation of the policy, the aggregate-demand curve remains at A03. Designate the long-run equilibrium that would follow such a policy as outcome C. Going back to the rst graph, place the grey point (star symbol) at outcome C. Because output at point C is V the natural rate of output, the unemployment rate associated with outcome (3 is v the natural rate of unemployment. Finally, use the green line (triangle symbo to draw the long-run Phillips curve (LRPC) on the second graph. 'lhis line is V line: 0 At the natural rate of unemployment O Representing the tradeo' between unemployment and ination 0 At the natural rate of output