Question
Describe how each of the following developments affects the AD and/or IA curves. Assume the economy starts at full employment. Describe how output, inflation, the
Describe how each of the following developments affects the AD and/or IA curves. Assume the economy starts at full employment. Describe how output, inflation, the real interest rate respond, immediately and in the long-run.
1. Oil prices increase temporarily. 2. The government observes the oil price shock and permanently increases government spending to offset the effect of the oil price shock.
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Macroeconomics
Authors: Charles I. Jones
1st Edition
978-0393926385, 0393926389
