Question since we are at full employment draw a as-ad graph, Ask an Expert

Economics

Question: Since we are at full employment, draw a AS-AD graph showing us at full employment. Be sure to label everything.

a. Now suppose oil prices double over the next 12 months. Draw and label the impact of the change in oil prices. What is the short run impact of change in oil prices on inflation and employment?

b. What can the fiscal policy makers do to move the economy from your answer in (b) back to full employment? What would the effect of the policies be on inflation and employment?

c. What can the monetary policy makers do to move the economy from your answer in (b) back to full employment? What would the effect of the policies be on inflation and employment?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M93136369

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