Year Consider the data of the following table for the years 2015 and 2016 Real GDP Potential GDP Unemployment rate 4

1] In the given condition real GDP in 2015 is higher than the potential GDP which means that the actual output is more than the expected, also the aggregate demand surpasses aggregate supply thus pushing the limits of the economy and causing inflation in the economy.

2]Apart from the increase in the real GDP , there is increase in the unemployment rate because there are various reasons :

apart from the recession and recovery of economy causing unemployment , there exists natural rate of unemployment which generally occur in every economy even in the developed economics also because of dynamic nature of market, companies contraction or expansion with the tenure of time, etc causes natural rate of unemployment.

And This natural rate of unemployment keep on increasing gradually due to combination of social, political and economic factors working together in an economy.

3] Inflation and unemployment have inverse relationship , if there is increase in the unemployment rate then there will be decrement in the inflation rate or vice versa. In 2016 unemployment rate is more than 2015 therefore, there is lower inflation rate in the 2016.

Yes answer completely depends upon the recession being caused by the supply shock or the change in aggregate demand because if there is increase in the aggregate demand is increased then there will be increase in the inflation rate becuase of increases prices due to shortage created by the gap in the aggregate demand and aggregate supply.