Please refer to data to answer question 3

3. (20 pts) Consider the "oil shocks" that led to a sharp increase in international oil prices in the 1970s (see graph below). Did they represent a demand shock or a supply shock for your country of study? Explain. (Hint: look at economic growth and inflation in your country around the period 1978-83). Country Year Economic growth: the Inflation: percent rate of change of real change in the GDP Consumer Price Index Mexico 1978 8.96 17.5 Mexico 1979 9.7 18.2 Mexico 1980 9.23 26.4 Mexico 1981 8.53 27.9 Mexico 1982 -0.52 58.9 Mexico 1983 -3.49 101.9 $40.0 $35.0 International Oil Prices $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 SO.0 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980