Question
According to the East Asia and Pacific Economic Update published by the World Bank in April 2015, the following factors have affected China's real GDP
According to the East Asia and Pacific Economic Update published by the World Bank in April 2015, the following factors have affected China's real GDP in 2015.
Global economic recovery supports a moderate increase in China's exports.
China benefits from a fall in the world price of oil.
U.S. firms to relocate their labor-intensive manufacturing industries to low-cost countries.
a)Explain how each of the above factors changes short-run aggregate supply, long-run aggregate supply, aggregate demand.
b)Explain how each factor separately affect China's real GDP and the price level, starting from a position of long-run equilibrium.
c)Explain the combined effects of these factors on China's real GDP and the price level, starting from a position of long-run equilibrium.
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