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e. By the end of year 5 , the country XXX 's was once again where output was at its potential output (yP), and expected inflation, e, equaled its actual inflation (Note in the first sentence of part e (previous sentence), that starting point is where y=yP ) At the beginning of year 6 , there was a severe global economic recession that affected country's rare earth exports. The severe global recession lasted for two years into year 7. In the meantime, the central bank implemented conventional expansionary polistes until the nominal interest rate ( () dropped to zero. What happens to country XXX's economy if the government did not implement additional policies? Without active government policies to bring the economy back to its potential output, show what happens to this economy over the long run. Use the aggregate demand and aggregate supply analysis to show what happens to the economy's aggregate output and inflation during year 6 and year 7. Label your graph appropriately. Clearly identify the relevant factors in your explanation of what happens to aggregate output and inflation. e. By the end of year 5 , the country XXX 's was once again where output was at its potential output (yP), and expected inflation, e, equaled its actual inflation (Note in the first sentence of part e (previous sentence), that starting point is where y=yP ) At the beginning of year 6 , there was a severe global economic recession that affected country's rare earth exports. The severe global recession lasted for two years into year 7. In the meantime, the central bank implemented conventional expansionary polistes until the nominal interest rate ( () dropped to zero. What happens to country XXX's economy if the government did not implement additional policies? Without active government policies to bring the economy back to its potential output, show what happens to this economy over the long run. Use the aggregate demand and aggregate supply analysis to show what happens to the economy's aggregate output and inflation during year 6 and year 7. Label your graph appropriately. Clearly identify the relevant factors in your explanation of what happens to aggregate output and inflation

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