Suppose that potential GDP in a small country is $10,000 in year 1 and real GDP is

Question:

Suppose that potential GDP in a small country is $10,000 in year 1 and real GDP is also $10,000. Potential GDP grows at a rate of 3% per year.
a. Calculate potential GDP for the next six years.
b. If real GDP in year 4 is $10,500, what is the output gap?
c. If real GDP in year 6 is $11,700, what is the output gap?