In the graph, the economy is in long-run equilibrium at point A. LRAS, SRAS, Now, assume that there is an unexpected increase in the price of oil. 1.) Use the line drawing tool to show the resulting short-run equilibrium on your diagram. Label any new aggregate demand or aggregate supply curve as AD2 SRAS, or LRAS2 as appropriate. 2.) Use the point drawing tool to locate the new short- run equilibrium point. Label this point B. Carefully follow the instructions above, and only draw the required objects. AD1 Real GDP (trillions of 2012 dollars) Price level (GDP Deflator, 2012 = 100)

In the graph, the economy is in long-run equilibrium at point A. LRAS, SRAS, Now, assume that there is an unexpected increase in the price of oil. 1.) Use the line drawing tool to show the resulting short-run equilibrium on your diagram. Label any new aggregate demand or aggregate supply curve as AD2 SRAS, or LRAS2 as appropriate. 2.) Use the point drawing tool to locate the new short- run equilibrium point. Label this point B. Carefully follow the instructions above, and only draw the required objects. AD1 Real GDP (trillions of 2012 dollars) Price level (GDP Deflator, 2012 = 100)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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