Macroeconomics - discussion question?

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alvinchou2003

2009-03-25 12:39 am

1) Suppoer the economy is operating at full employment and foreign countries raise the world price of oil. Assuming policy-makers do not take any actions, describe what will happen to prices and output in the short run.

How should I answer to this question and which diagram should i use?
please give explicit answer...thanks!!!

更新1:

this is an discussion question how can i extend the answer to like a passage?

回答 (1)

[匿名]

2009-03-25 12:51 am

✔ 最佳答案

Oil prices and all prices that are affected by oil will rise. Output will decrease in the short run. Over time compensations will be made and everything will be back to normal with oil usage decreased.

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