1. Is the equilibrium GDP the same as the potential GDP in the AE model?Briefly explain.(3pts)

b.In an article in the New York Times in 2009, the author makes the following statement: "And whenever the economy begins growing again, it won't feel good for a while.The unemployment rate may continue to rise into 2010."Why would the unemployment rate continue to rise if the economy has begun to grow again? (3pts)

Q2. Briefly explain how each of the following events would affect the aggregate demand curve or the short-run aggregate supply curve.

a.An increase in (labor) productivity (2pts)

b.An increase in interest rates (2pts)