To accurately determine the economic conditions at points Y2 and PL2, it's necessary to have a visual or more context about these points, typically represented on a graph that includes aggregate demand and supply curves, or a production possibilities frontier. However, I can provide some insights based on common interpretations of such points in economic graphs:
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Recession: This occurs when the economy is operating below its potential output, often represented by a point to the left of the potential output line on a graph. The economy has high unemployment and low consumer demand.
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Inflation: This is generally shown by an economy operating above its potential output, often leading to demand-pull inflation, represented by points above the potential output line.
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Potential Output: This refers to the maximum output an economy can produce when operating at full capacity, typically depicted as a vertical line in aggregate supply and demand graphs.
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Negative Demand Shock: This indicates a sudden decline in demand, moving the economy's output below its potential, possibly leading to a recession if it persists.
Without additional context or a graph, I can't specify which answer applies to Y2 and PL2. However, if Y2 and PL2 refer to points where the economy's output is less than potential output, it could indicate a recession or a negative demand shock. If they refer to points above potential output, it could indicate inflation.
For the most accurate determination, please provide the location of points Y2 and PL2 in relation to potential output.