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In: Economics

Using AD/AS model and diagrams, discuss the short-run and long-run impacts of the following events on...

Using AD/AS model and diagrams, discuss the short-run and long-run impacts of the following events on the price level and output of the domestic economy (starting from the full-employment level): a. A rise in oil prices. Based on your analysis, suggest a policy recommendation in (a). b. A decrease in tourism. Based on your analysis, suggest a policy recommendation in (b).

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