Action in response to the oil price increase

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Reference no: EM139337

Q. For all (qualitative, non-numerical) graphs, be sure to label all curves and axes carefully. Explain how both initial equilibrium and final equilibrium values, making sure that curve shifts and/or movements along a curve are marked.

a. Explain how and Elucidate Illustrate what happens to real interest rates and real domestic investment in the market for loan able funds if there is a decrease in capital inflow from abroad.

b. Explain how and elucidate what happens to real wage rates and the size of the labor force in the labor market following an increase in the capital stock.

c. Following a sharp decrease in the money provide caused by Federal Reserve policy, explain how and elucidate what happens in the market for goods and services to both the national price level and real GDP in both the short run and the long run assuming no further government policy.

d. Explain how and Elucidate Illustrate what happens to real GDP and the national price level following an increase in the price of oil in both the short run and the long run assuming that the government takes no action in response to the oil price increase.

Reference no: EM139337

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