Problem 3: Tying the Phillips Curve to Output Gaps [5 Points] Consider the following economy with an Aggregate Demand (AD) Function given by the following: AD = 1,000 2p And an Aggregate Supply (AS) Function given by the following: AS = p- 200 And Potential Real GDP of Y* = 120. 13. Use the AD-AS model to draw a figure showing which output gap this economy is currently in. What would we expect to happen to the wage rate over the medium run, assuming that the government does not intervene to close this output gap? [2 points] 14. Draw a Phillips Curve similar to the one drawn in class, with change in wages on the y- axis, and unemployment on the x-axis. On what portion of this Phillips Curve must the current economy be on before it adjusts in the medium-run? [2 points] 15. Where on the Phillips Curve would they economy be after they complete this medium- run adjustment? [1 point]