5. An economy is initially in equilibrium, both in the short-run and in the long-run. Using the AD, SRAS, and LRAS curves, show and explain what would happen to the equilibrium aggregate price and output in both the short-run and the long-run if the following scenario occurs. a. Oil production increases significantly as OPEC and non-OPEC countries have agreed to raise their production quota, and the government anticipates the situation by implementing a contractionary fiscal policy. b. COVID 19 pandemic has forced the government to initiate a total lock down.
5. An economy is initially in equilibrium, both in the short-run and in the long-run. Using the AD, SRAS, and LRAS curves, show and explain what would happen to the equilibrium aggregate price and output in both the short-run and the long-run if the following scenario occurs. a. Oil production increases significantly as OPEC and non-OPEC countries have agreed to raise their production quota, and the government anticipates the situation by implementing a contractionary fiscal policy. b. COVID 19 pandemic has forced the government to initiate a total lock down.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter23: The International Trade And Capital Flows
Section: Chapter Questions
Problem 16SCQ: Both the United States and global economies are booming. Will U.S. imports and/or exports increase?
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Question
![5. An economy is initially in equilibrium, both in the short-run and in the long-run. Using the
AD, SRAS, and LRAS curves, show and explain what would happen to the equilibrium
aggregate price and output in both the short-run and the long-run if the following scenario
occurs.
a. Oil production increases significantly as OPEC and non-OPEC countries have agreed
to raise their production quota, and the government anticipates the situation by
implementing a contractionary fiscal policy.
b. COVID 19 pandemic has forced the government to initiate a total lock down.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8d7d9035-2690-40fc-ab65-ac3dc4efd035%2F2ea058a7-5598-4fba-b9e3-94e90838bcbf%2Flnx48n_processed.png&w=3840&q=75)
Transcribed Image Text:5. An economy is initially in equilibrium, both in the short-run and in the long-run. Using the
AD, SRAS, and LRAS curves, show and explain what would happen to the equilibrium
aggregate price and output in both the short-run and the long-run if the following scenario
occurs.
a. Oil production increases significantly as OPEC and non-OPEC countries have agreed
to raise their production quota, and the government anticipates the situation by
implementing a contractionary fiscal policy.
b. COVID 19 pandemic has forced the government to initiate a total lock down.
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