Using an AD SRAS and LRAS curve explain the effect of the following events on the aggregateoutput

Question

Using an AD, SRAS, and LRAS curve, explain the effect of the following events on the aggregate-output,

unemployment and price level both in the short-run and in the long-run. Explain the process by which the economy moves from one long-run equilibrium point to another.

(a) There is an increase in oil-prices (and no intervention from the government or the Fed).

(b) The Fed increases money supply (after the initial increase in oil-prices).

price
RRAS
Gaurav
SKAS
DATE :
20
PAGE No
SRASI
B
A ADI
AD
Aggregate output.
Initially n the economy is in longlen
equidb rium at A. Now Due to macase in
oil !
price 8 Short run Aggregate Supply…
Economics