Because of corona pandemic, many oil producers have experienced a decrease in their production and the government in th
Posted: Sun May 29, 2022 7:13 pm
Because of corona pandemic, many oil producers have
experienced a decrease in their production and the government
in this economy has decreased tax on consumption simultaneously.
Assume that the economy is initially in long run equilibrium
and holding everything else constant, use the AD / SRAS diagram to
explain the following:
1. What will happen to this economy in short run?
Explain. (3 points)
2. What will happen to this economy in long run?
Explain. (2 points)
3. What will happen to real GDP per capita in long run?
Explain. (2 points)
4. Let assume that you are hired as a consultant to fix
this economy. Use all what you have learned in Econ 103 to
provide convincing recommendations to interested parties. (4
points)
Hint: Answer shouldn¶t exceed four
lines.
experienced a decrease in their production and the government
in this economy has decreased tax on consumption simultaneously.
Assume that the economy is initially in long run equilibrium
and holding everything else constant, use the AD / SRAS diagram to
explain the following:
1. What will happen to this economy in short run?
Explain. (3 points)
2. What will happen to this economy in long run?
Explain. (2 points)
3. What will happen to real GDP per capita in long run?
Explain. (2 points)
4. Let assume that you are hired as a consultant to fix
this economy. Use all what you have learned in Econ 103 to
provide convincing recommendations to interested parties. (4
points)
Hint: Answer shouldn¶t exceed four
lines.