[1] Explain why would you expect inflation rate to accelerate if actual unemployment rate declined to a level lower than the "full employment" unemployment rate & remained at that low level for a year or longer? Describe your answer.

[2] Draw an AS/AD diagram illustrating your answer to part (A) That is, draw an AS/AD diagram which shows what happens as an economy operates for a sustained time at a level of actual unemployment that is lower than the unemployment level at potential RGDP. Be sure to label all lines and axes in your diagram clearly.