Refer to the figure A above. Figure A Figure B Price Price Q, Quantity Q, Q2 Q3 Quantity Assuming this market is representative of the economy as a whole, a negative demand shock will: 1) increase both the price level and the quantity of output produced. 2) increase output, but leave prices unchanged. 3) lower the price level, but leave output unchanged. 4) raise the price level, but leave output unchanged.

ssume that the Australian economy originally starts at the long-run equilibrium. The shock in focus is the introduction of robots to undertake manual tasks and replace low-skilled workers. In 2019, Oxford Economics forecasted that approximately 20 million jobs around the world could be replaced by robots by 2030. This trend will exert sweeping and profound impacts on economies around the world, including Australia. Required: Considering the shock above, point out how Aggregate Demand, Short-run Aggregate Supply and Long-run Aggregate Supply will be affected  Explain clearly in words the reasons behind the effects on Aggregate Demand, Short-run Aggregate Supply and Long-run Aggregate Supply, as pointed out in

"The oil price run - up of 2007 - 08 was caused by strong demand confronting stagnating world production. Although the causes were different, the consequences for the economy appear to have been very similar to those observed in earlier episodes, with significant effects om overall consumption spending and purchases of domestic automobiles in particular. The experience of 2007 - 08 should thus be added to this list of recessions to which oil prices appear to have made a material contribution". Oil price shocks have an evident impact on the short run aggregate supply curve. With the help of a graph demonstrate how rising oil prices affect the SRAS and explain what other factors can cause this shift.

Suppose we have a market with upward sloping supply and downward sloping demand curves. After which of the following shocks can we guarantee that equilibrium price will increase? A shock which simultaneously shifts the supply curve downwards and the demand curve upwards. A shock which shifts the demand curve downwards. A shock which simultaneously shifts the supply curve downwards and the demand curve downwards. A shock which shifts the supply curve upwards. More than one of the above.