Use the information given in the image attached to answer the following questions.

Using a monetaristew classical AD/AS diagram, explain whether the economy of Urbania is currently experiencing an inflationary gap or a recessionary gap (Text 1, Paragraphs 2 and 4).

PLEASE BE SURE TO ACTUALLY DRAW AND USE DIAGRAMS.

Text A: Paragraph 1: With a population of 2000 people, Urbania is the most populated country in the continent of Gondwana and accounts for 35 % of Gondwana's population. It is the biggest oil exporter in Gondwana and also has the largest natural gas reserves in the continent. Paragraph 2: Economic growth is estimated to have been 6% in 2019, owing to continued strong performance mainly in services, but also industry (apart from oil mining) and agriculture. The oil and gas sector was in decline, although at a slower rate than in the previous year. Revenues from oil and gas were estimated to have declined by 1.3%, relative to a decline of 13.1 % in 2018. The sharp decline in oil prices since the third quarter of 2019 has posed major challenges to the country's current account balance and public finances. Oil contributes close to 90 % of export revenues and roughly 75% of the country's total budget revenues. Paragraph 3: Lower oil prices will continue to pose strong challenges for public finance at all levels of government during the year and will also represent a major constraint on the ability of the new government to introduce some of its ambitious programs. It is focusing on anti- corruption, the economy, including jobs and unemployment, and security. Paragraph 4: The central bank of Urbania raised its base interest rate to 14 % in July 2019. It was the second rate increase in the year. In addition, the inflation rate kept its upward trend and reached 16.5 % in June, the highest since 2010. Paragraph 5: The major medium-term challenge for the government of Urbania is to accelerate the creation of productive jobs through private sector growth and to make improvements in education (skills). So far, the pace of job creation has been inadequate, leading to increasing frustration among underemployed Urbanian youth. Table 1: 2019 GDP per capita $ 4000 GDP ? Consumption spending $ 3.5 million Investment spending $ 1.5 million Government spending ? Export revenue $ 1.7 million Import spending $ 0.5 million