Consider a macro-economy that was initially at equilibrium.Using an aggregate demand and aggregate supply diagram model of
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Question:
Consider a macro-economy that was initially at equilibrium.Using an aggregate demand and aggregate supply diagram model of the economy, graphically illustrate and discuss the short-run and long-run effects of the following events upon the economy:
(a)The imposition of a carbon tax upon local big polluting companies;
(b)An appreciation in the foreign exchange rate value of the economy's currency;
(c)A major trading partner's economy fall into recession;
(d)The country's main exports fall in price while the goods the country imports from abroad rise in price
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