An oil cartel effectively increases the price of oil by 100%

An oil cartel effectively increases the price of oil by 100%, leading to an adverse supply shock in… Show more An oil cartel effectively increases the price of oil by 100%, leading to an adverse supply shock in both country A and country B. Both countries were in long-run equilibrium at the time of the shock. Use the chapter 10 model of aggregate supply and aggregate demand to answer the following questions. a. Country A takes no stabilizing action. Use graphs to show the short and long run impacts of the temporary supply shock. b. Country B attempts to stabilize the economy. What policy and this country use? Use graphs to show the short and long run impacts of the temporary shock. c. Draw a graph of output and prices over time for each country. • Show less

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