1.6. Use Figure 13.11 as a starting point for this problem and consider the initial impact of the following circumstances on the aggregate demand, Solow growth, and short-run aggregate supply curves.

a. A war in the Middle East rapidly increases the price of oil.

b. More and more consumers develop a fear that they are in danger oflosing their jobs and businesses fear that they are in danger of losing their customers.

c. Add to this set of problems the uncertainty that a new administration introduces by pushing through significant social reform expected to increase business costs and reduce consumers' discretionary income.