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.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter23: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 3CQQ

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