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Many economic analysts believe that currently Indonesian economy is considerably below its potential output. Meanwhile, recent tensions in the Middle East potentially will potentially push

Many economic analysts believe that currently Indonesian economy is considerably below its potential output. Meanwhile, recent tensions in the Middle East potentially will potentially push the oil price upward significantly, coupled with a significant fall in the world income. If Indonesia is an oil importer: a. What will happen to Indonesian national output? Demonstrate your prediction graphically using relevant models. b. What policy might you suggest to the government? c. Demonstrate the expected total effect of your advice using relevant models!

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