What policy might you suggest to the government

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Reference no: EM13156392

You are told that the economy is significantly below its potential output and that the following will happen next year: World income will fall signigicantly and the price of oil will rise significantly. ( the united states is an oil improter.)

a) what will happen to the price level and output? Using the AS/AD model, demonstrate your predictions graphically.

b) what policy might you suggest to the government?

Reference no: EM13156392

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