Question
Suppose the oil price decreases in Canada. a.) Is this a supply shock or demand shock? Explain why. Using aggregate demand and supply curve show
Suppose the oil price decreases in Canada.
a.) Is this a supply shock or demand shock? Explain why. Using aggregate demand and supply curve show what will be impact of this shock in the output and price level in the short run.
b.) What stabilization policy the central bank can take to restore the output to natural-rate level output and what will be the impact on price level of this policy?
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
