During this course, there has been much discussion about factors that move the economy and shift equilibrium. There has been a discussion about supply and demand shocks that affect aggregate demand and shift the economy from equilibrium. The economic history of the U.S. has many examples of supply shocks that have had both positive and negative effects on the U.S. economy and that may have rippled and affected the global economy.

For this assignment, select a supply shock from the list below and research articles that describe the event and the perspective of what caused the event. The assignment should contain the following key elements:

A thorough description of the supply shock and economic perspective

Describe the shock

What were the causes

What were the effects

Prices, wages, commodity prices (specific goods)

What should have been the appropriate policy response (according to the theory)

What were the policy responses (fiscal/discretionary)?

Where these correct or not?

Explain why the response was correct or not

Use FRED data to support the causes and effects of a supply shock

(No more than 34 graphs)

Support your position with appropriate references

Supply Shock List

Oil supply shock of 1979