Each of the following events caused a shift in the (A D) or (A S) curve in

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Each of the following events caused a shift in the \(A D\) or \(A S\) curve in Canada. Identify which curve was affected and describe the effect on equilibrium real GDP and the price level.

a. OPEC's actions to restrict oil output significantly increased the world price of oil in 197 9-1980.

b. World commodity prices increased sharply from 200 2 to 200 8. Many of these commodities are both produced in Canada and used as important inputs for Canadian firms.

c. The end of the Cold War in 199 0 led to large declines in defence spending in many countries (including Canada).

d. The federal government and (many) provincial governments reduced corporate income-tax rates between 200 0 and 201 1.

e. The federal government increased its level of government purchases \((G)\) in 200 9 and 201 0, amidst a global recession.

f. The beginning of a strong recovery in the United States in 201 4 led to a large increase in the demand for many Canadian exports.

g. The world price of oil fell from U.S. \(\$ 105 \) per barrel in June 201 4 to U.S. \$50 in February 201 5.

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Macroeconomics

ISBN: 9780133910445

15th Edition

Authors: Christopher T S Ragan

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