a) Oil price shocks have an evident impact on the short run aggregate supply curve. With the help of a graph demonstrate how rising oil prices affect the SRAS and explain what other factors can cause this shift. b) Different theories attempted to explain why SRAS curves slope upwards. Identify and explain these theories explaining what they have in common.
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- Suppose, as an economist, you are asked to analyze an issue unlike anything you have ever done before. Also, suppose you do not have a specific model for analyzing that issue. What should you do? Hint: What would a carpenter do in a similar situation?Consider the following extract and then answers the questions that follow: How SA's recession is impacting consumer spending Consumers are actively doing pre‐shopping research either through broadsheets or online, and comparing retailers’ offerings to seek out the best value before even leaving the house. Consumers simply no longer purchase certain items, pointing to their extreme need for frugality in current market conditions. Added to this, consumers have also changed the way they use these products in their homes to maximise usage and minimise wastage. This includes the alternative use of products, like using margarine in place of cooking oil and fragranced body lotion instead of perfume. Q1. Discuss the impact of the economy on consumer behaviour.Note: it is important that you consider using examples that is relevant and specific to the scenario provided when responding to this question. Q2. Finding cheaper prices online is one driver for online shopping. Describe any four other…“The oil Price run-up of 2007-08 was caused by strong demand confronting stagnating world production. Although the causes were different, the consequences for the economy appear to have been very similar to those observed in earlier episodes, with significant effects on overall consumption spending and purchases of domestic automobiles in particular. The experience of 2007-08 should thus be added to the list of recessions to which oil prices appear to have made a material contribution.” Source: Hamilton, J.D., 2009. Causes and Consequences of the Oil Shock of 2007-08 (No. w15002). National Bureau of Economic Research. a) Oil price shocks have an evident impact on the short run aggregate supply curve. With the help of a graph demonstrate how rising oil prices affect the SRAS and explain what other factors can cause this shift. b) Different theories…
- During the Covid-19 recession, from the fourth quarter of 2019 to the fourth quarter of 2020, consumer spending on residential construction ________ and consumer spending on services ________. Part 2 A. declined by 20 percent; increased by 20 percent B. increased by 5 percent; increased by 10 percent C. increased by 20 percent; declined by 5 percent D. declined by 25 percent; declined by 40 percentSuppose the economy of the hypothetical country “X” is currently in equilibrium at point A on thegraph. There were two major shocks to the economy in 2020.First shock was related to oil prices; the other was related to consumer confidence about futurebusiness conditions. Oil Shock: The economy X faced a rise in the average price of oil along with the rise of world price ofoil.E) Would an increase in oil prices cause a demand shock or a supply shock? Redraw the diagram toillustrate the effect of this shock by shifting the appropriate curve. What happens to theAggregate output and price level after the shock? (3)F) If policymakers wish to prevent the equilibrium output from changing in response to the oilprice increase, should they use contractionary or expansionary fiscal policy? (Redraw the graphfrom part E and show the change) (4)G) Even if the economy moves back to original Aggregate output, will there be any drawback? (1)Consumer Confidence Index: The Consumer Confidence Index…You are hired to work as economic advisor to His Excellency the PrimeMinister of Xanadu, an imaginary country that suffers from a severe recession condition due tothe Novel Coronavirus Pneumonia (COVID-19) pandemic.What are your recommendations for an urgent plan to rescue the economy of Xanadu?Specifically, what government policy actions are required? Explain to His Excellency thepossible drawbacks of your recommended course of actions.
- 5. Consider a situation in which an economic downturn reduces the demand for the output that an industry produces, and so for the input factors used to produce it. Often this leads to firms laying off workers. Discuss the issues associated with decisions of which factors to cut back on (Labor? or Capital?), Also, in the case of labor, discuss the issues of determining which particular people would have their hours cut (partially or entirely). Instructions for your tutor: This is related to a survey of economics class. This is the book: Anderson, D., Survey of Economics. (2020). Worth Publisher Macmillan learning. chapter 11 and 12.https://www.youtube.com/watch?v=6EDCnhbUpgE Modern logistics! It would be hard to imagine our daily digital lives without them. As consumers, we can shop online every day and any hour of the day. We expect everything to arrive on time – whether clothing, printer spare parts or a set of screws. Online shopping is booming: in 2018, courier, express and parcel services, the so-called CEP sector, delivered around 3.5 billion shipments in Germany alone. And this is an upward trend. But how does all this work so smoothly, safely and on time? After all, we live in turbulent times: digitalization, climate crisis, growing world population and political and economic instability. How does the logistics industry rise to such challenges? For answers to these questions we need to dive deep into the world of modern logistics. Our film takes us into huge, fully connected warehouses, watching as fleets of cargo planes are prepared for take-off at night and accompanying couriers on delivery bikes on…Please please help me asnswer it correctly and fastly The global oil market has been affected in the recent years by many factors that induces the global price to fall. This consequence is vital for the budget of the oil dependent countries. After the huge decrease on oil price in 2016, many traders and analysts believe that oil markets are still not immune to many problems and the oil price will tend to fall again. The main factor and problems toward a fall of the oil price started in 2015 but considering that people and oil companies do not tend to react immediately to the change of oil price, the total consumption and production of oil did not get any surprised changes in the short- run. The main factor that caused the drop on the oil price is the OPEC failure. The member countries of OPEC did not agree to stabilize the oil markets, since the organization decided against cutting production at a 2014 meeting in Vienna. It is estimated that if OPEC does not cut production, the…
- Suppose U.S. drivers purchased $50 billion of ExxonMobil-produced gasoline during a recent year, with one-half purchased directly from ExxonMobil-owned gas stations and one-half from independent (or third-party) gas stations. Suppose further that ExxonMobil purchased the oil (which it refined into gasoline) from foreign producers for $20billion and that it receives 60 percent of the sales revenue that independent stations generate from selling ExxonMobil gasoline. In this case, the value added by ExxonMobil to U.S. GDP is $__billion.5. Can the supply chain handle the necessary changes? Before an organization commits toramping up its input, it is essential to confirm that its supply chain will be able to handlerelated requirements.Imagine you are the owner of a natural gas company. You can either extract as much of the resource as fast as possible or delay extraction until a future time. Projections indicate that the price of natural gas is expected to fall in the future. What would you do in the present? a. Sell as much natural gas as possible now and less in the future—reflected by a rightward shift of the current supply curve in the future. B. Sell as much natural gas as possible now and less in the future—reflected by a movement down the current supply curve.C. Sell as much natural gas as possible now and less in the future—reflected by a movement up the current supply curve.D. Sell as little natural gas as possible in the present and delay extraction until the future—reflected by a leftward shift of the current supply curve in the future.