Oil and the Economy of 1970 have Migirated the oil fields oi Middle Cmde oil is a key into the ot mm-ly oi world's oil Sndi Anbia. Middle Eastern cummtries_ CHAPTER AGGREGATE DEMAIO ANO AGGREGATE supper 751 political or.gin) of oil flmving this oi oil the U S. that produce gasoline. o:lwr preuiuct_s tlwy it pmf- itable to of at any Hice rhe is a shift in in to s flaticm. first episcnie of this m the mid-197(b. The with luge oil got of OPEC. Orgarmtion of petmlemm Exporting OPEC is a cutela oi tlut to thwart to oil 1973 to 1975, oil in Oil-importing wtNld The L S. rate as med by Cpl 10 first time Umnploymt from 4_9 1973 to S. 5 1975. the thing a few the late 1970s. the t s again the supply of oil to raise the 1978 to 1981, price of oil doubled. again, tlw was FYI The Origins of the Model of Aggregate Demand and Aggregate Supply that a ing of aag*e aggvte is step it nd dd cf ttiE tc a a at wtzt In to explain geng* the rge of fy nd Fad a craic of clasical the ot A offering Fad the Wtg fat fd aggregate zag pub": chapter. in det* of rmty to in as this to ut 752 PART xn SHORT-RUN Ecoww: stagflation. which subsided after iit OPEC again 10 ye ar. But willing to accommdate such a large n a recessicm fo low. Un nt e m t 6 t in 1979 to about 10 a few The nurket oil also be a of favcuable shifts m C/mnges n i Mi"le oil Conclusion gate supply. In out of OPEC. on to oil In for fell by about half. This fall in oil prm . which it profitable to supply and As a aggregate-supply curve to r.ght_ The U S. the of stagflation: Output grew rapidly, urmploymt fell, rate its In world oil a Put oi is efforts m team ology y 's ail. t oil prcduce a of GDP aim t 40 OPEC of 1971k As a of any chm.ge m oil is today it in WICK QUIZ of a p in of aggregate d.d agggate to The Fit. of tnt futs ic unvity. luve a explain oi gate aggregate We study of this in next to fully m the might