Explain why you think rising oil prices can aggravate a
crisis.
Draw a dynamic aggregate demand and aggregate supply
graph showing the economy moving from potential GDP
in 2017 to potential GDP in 2018, with no inflation. Your
graph should contain the AD, SRAS, and LRAS curves for
both 2017 and 2018 and should indicate the short-run
macroeconomic equilibrium for each year and the directions
in which the curves have shifted. Identify what must
happen to have growth during 2018 without inflation.