Explain macroeconomic consequence of one-time negative shock

Reference no: EM132118721

Question: A negative oil price shock: It is common to blame some of the poor macroeconomic performance of the 1970s on the rise in oil prices. In the middle of the 1980s, however, oil prices declined sharply. Using the AS/AD framework, explain the macroeconomic consequences of a one-time negative shock to the inflation rate, as might occur because of a sharp decline in oil prices.

Reference no: EM132118721

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