Reference no: EM132285615

For each of the following events, explain the effect if any, on the position of the short and long run aggregate supply curves and the aggregate demand curves.

a. In the summer of 2003, a single cow in Alberta was found to suffer from BSE, or mad cow disease. As a consequence, many countries stopped importing Canadian beef and Canadian ranchers found that, at any price, they could sell much less beef than they could previously.

b. Over the past decade, prospectors have discovered diamonds in Canada. The development of these diamond mines has progressed to the point that today Canada produces roughly 10 percent of the world's diamonds.

c. Ongoing crises in the Middle East and the high price of oil have encouraged firms to significantly expand plants for the extraction of oil from the oil sands region of Alberta.

d. In 2003, an outbreak of severe acute respiratory syndrome (SARS) in the Toronto region resulted in a significant reduction in the number of  tourists visiting Canada.