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(Solved): Question content area left Part 1 Analyze the effects of a temporary increase in the price of oil ...



Question content area left Part 1 Analyze the effects of a temporary increase in the price of oil ​(a temporary adverse supply shock​). Because the supply shock is​ temporary, you should assume that the expected future MPK and​ households' expected future incomes are unchanged. Assume throughout that output and employment remain at​ full-employment levels​ (which may​ change). Part 2 The effect​ on: current output decrease left parenthesis down arrow right parenthesis ​, employment decrease left parenthesis down arrow right parenthesis ​, and the real wage decrease left parenthesis down arrow right parenthesis . Part 3 In the diagram to the​ right, show the effect of this shock. Using the line drawing tool​, show the effect of this shock. Properly label this line. Part 4 Carefully follow the instruction​ above, and only draw the required object.



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