An economy produces only fun and food. Table 1 shows the prices and the quantities of fun and food produced in 2013 and 2014. The base year is 2013.  If potential GDP was $270 in 2013 and it grew by 1...

An economy produces only fun and food. Table 1 shows the prices and the quantities of fun and food produced in 2013 and 2014. The base year is 2013.

 If potential GDP was $270 in 2013 and it grew by 1 percent in 2014, in which phase of the business cycle is the economy? Explain.