The figure below shows the effect of a 2001 increase in government purchases on the hypothetical path of real GDP compared to the path of potential GDP (the baseline) between 2001 and 2005. 
(A)Using the AD curve and IA line analysis, explain what is occurring between 2001 and 2002.
(B)Using the AD curve and IA line analysis, explain what is occurring between 2002 and 2004.
(C)Using the AD curve and IA line analysis, explain what is occurring between 2004 and 2005.
Definitions:
Consumer Groups
Organizations or collectives formed to protect the interests of consumers by advocating for consumer rights and providing education on various issues.
Segmenting Variable
Characteristics of individuals or groups used to divide a market into segments for targeted marketing.
Pre-Qualified
The state of having been evaluated and deemed eligible for something, such as a loan or service, based on preliminary criteria.
Mass Affluent
Individuals with a significant amount of disposable income, though not wealthy by traditional standards, making them a target for certain luxury goods and financial services.
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