Please help complete the following worksheet:

Video Link - https://www.youtube.com/watch?v=GywvZAkyNPc&t=486s

INTHINKING Activity 1: Inflationary gap (a) Using information from the video draw a diagram in the box to the right, illustrating an economy in its long run equilibrium from the neo-classical perspective. (b) Illustrate the initial short run effect of a rise in AD and label the inflationary gap created. RMI GOP [Y] (c) Explain, using the diagram, why the growth in real GDP disappears in the long run? Real GDP mINTHINKING Activity 2: Closing a deflationary gap The diagram to the right illustrates the economy in equilibrium. LMA'S (a) Illustrate the impact of a fall in AD on the diagram and label the size of the recessionary gap. PL Ral GOP m (b) Explain, using a diagram, why neoclassical economists believe that the deflationary gap will not last and the economy will eventually return to its long run equilibrium. Real GOP [)