The figure below plots real and potential GDP between 1971 and 1977. Given the data in the corresponding table, can changes in the rate of inflation over this period be explained by the percent deviation between real and potential GDP? Do these data support or refute the validity of the assumptions about the IA line? $$\begin{array} { | c | c | }
\hline \text { Year } & \begin{array} { c }
\text { GDP Price } \
\text { Deflator }
\end{array} \
\hline 1971 & 37.10 \
1972 & 38.80 \
1973 & 41.30 \
1974 & 44.90 \
1975 & 49.20 \
1976 & 52.30 \
1977 & 55.90 \
\hline
\end{array}$$

Question

The figure below plots real and potential GDP between 1971 and 1977. Given the data in the corresponding table, can changes in the rate of inflation over this period be explained by the percent deviation between real and potential GDP? Do these data support or refute the validity of the assumptions about the IA line?  $$\begin{array} { | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { GDP Price } \
\text { Deflator }
\end{array} \
\hline 1971 & 37.10 \
1972 & 38.80 \
1973 & 41.30 \
1974 & 44.90 \
1975 & 49.20 \
1976 & 52.30 \
1977 & 55.90 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The Answer of The figure below plots real and potential GDP between 1971 and 1977. Given the data in the corresponding table, can changes in the rate of inflation over this period be explained by the percent deviation between real and potential GDP? Do these data support or refute the validity of the assumptions about the IA line?  $$\begin{array} { | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { GDP Price } \
\text { Deflator }
\end{array} \
\hline 1971 & 37.10 \
1972 & 38.80 \
1973 & 41.30 \
1974 & 44.90 \
1975 & 49.20 \
1976 & 52.30 \
1977 & 55.90 \
\hline
\end{array}$$

The Figure Below Plots Real and Potential GDP Between 1971