Guiding Scenario

In 2020, countries around the world had to grapple with the effects of COVID-19,a highly infectious disease caused by a newly discovered coronavirus, for which there was no treatment or vaccine. The COVID-19 pandemic prompted public health restrictions, with widespread economic impacts. As the global oil demand crumbled and OPEC's oil price war continued, oil-producing and oil-exporting countries also faced a second economic challenge of low oil prices.

Assume that it is 2020 and country X is facing the economic impacts of both COVID-19 and low oil prices for its oil exports. Use the relevant economic theories and concepts of Macroeconomics to answer the question below.

How is the fall in global oil demand expected to affect the aggregate demand of Country X? Assuming that other factors remain constant, what can be expected to happen to the country's equilibrium price level and income?