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A few weeks ago, Saudi Arabia and Russia failed to reach an agreement to collectively reduce oil production in the face of falling demand. This
A few weeks ago, Saudi Arabia and Russia failed to reach an agreement to collectively reduce oil production in the face of falling demand. This resulted in a large, and sharp fall in the oil price. Suppose this is long-lasting what will happen to the economy. Using the IS-LM and AS-AD framework, discuss the short-run as well as the medium-run impact of the permanent oil shock, assuming everything else is constant
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