I am asking you to assess the impact of the rise in energy prices experienced in industrialized countries today with the analogous impact of high prices in the 70s and early 80s. 50 years ago industrialized countries experienced stagflation, that is rapid inflation and considerable increases in unemployment rates after the first oil price shock hit. The same happened following the second shock in 1980. Do you think that the same symptoms will be today? In your answer you should explicitly explain the role of institutions and policy and address any similarities /differences between today and 50 years ago.

I am asking you to assess the impact of the rise in energy prices experienced in industrialized countries today with the analogous impact of high prices in the 70s and early 80s. 50 years ago industrialized countries experienced stagflation, that is rapid inflation and considerable increases in unemployment rates after the first oil price shock hit. The same happened following the second shock in 1980. Do you think that the same symptoms will be today? In your answer you should explicitly explain the role of institutions and policy and address any similarities /differences between today and 50 years ago.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Changes in macroeconomic indicators can often be of relevance to business decision-making. For instance, changes in macroeconomic performance reflected in indicators can impact things such as firms profit forecasts, expected sales growth, expansion plans, etc.Assume you are employed as a business analyst with the large Australian based mining company. Identify and discuss how each of thefollowing macroeconomic issues may be relevant to the firm:a) A world-wide economic slow-down.b) Appreciation of the Australian dollar relative to other major currencies.c) The government abolishes subsidies to the mining industry.
how would scenarios A- Recession & B-Economic Boom affect the opportunity cost of going to college vs going to work immediately after high school? in which scenario is the opportuinty cost of going to college higher ? why ?
On average, households spend 22.37 cents out of each dollar ofincome shocks. When people receive an additional dollar (an “income shock”), how many additional cents of that dollar do people spend on average.
S09.,hello, I know for sure that answer "positive supply shock; LRAS to the right," is wrong. ?
Linear stages theory, Structural-change model (Lewis two-sector model), International dependence/dominance model, Neoclassical model How do the contemporary models differ from the previous models? Coordination failures ComplementarityWhy do these models emphasize multiple equilibria and what does it mean?What problems may prevent economy from moving from a bad equilibrium to a stable one?Need to understand that graphWhat are the big push and O-ring theories (important to have a broad or general understanding ofthe two theories?)
Graphically show the impact of a positive technological shock. Include all three markets: Labor, Product, Capital. Start with initial steady state. Show impact of shock in the initial market. Next show the propagation mechanism--how it carries over into the other two markets. Show at least one set of the feedback loop, Show the new steady state.
COVID-19 has undoubtedly been a defining time in our generation's history, with effects on global economies comparable insome instances to what was experienced during the Great Depression of the 1930s. The pandemic has also recalled theeconomic shockwaves of the Global Financial Crisis of 2008/09. One can argue that this episode is like none seen beforebecause it hasn’t emanated from economic factors. The pandemic is also having a broad spectrum of effects on economiesand exchange rates globally.
A country has two regions, the North and the South, which are identical in all respects except the hourly wage and the number of workers. The demand for labor in each region iswN = $20 - .5EN and wS = $20 - .5ESwhere EN and ES are millions of workers. Currently there are 6 million workers in the North and 18 million workers in the South.a. What is the wage in each region?b. If there are no shocks to the economy, migration over time will result in an equalization of wages and employment. What would be the long-run wage and employment level in each region?c. Return to the original setup where there are 6 million workers in the North and 18 million workers in the South. As a policymaker, you decide not only to allow 2 million immigrants of working age to enter your country, but you have the authority to resettle the immigrants wherever you want. How should you distribute immigrants across the regions to maximize the country’s immigration surplus? Besides maximizing the immigration surplus…
Suppose 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…
What happened to the demand for rental cars during the first half of 2021? I.e., was there a positive or negative demand shock? What caused the shock?
When there is a shockto the economy and GDP declines, how much of the decline is due to a changein potential output and how much to a change in short-run output?
Case : Dealing with Asymmetric Shocks in the EurozoneMember countries of the Eurozone are currently hit by the Covid-19 pandemic, though somecountries are hit harder than others as can be seen from the recent projections of the IMF,here shown for Germany and Italy as an example, in the figure below. Question 1 Explain what is meant by an asymmetric shock and discuss the role of monetary, fiscal andincome policies could play to deal with such a shock for a Eurozone member country.