dentify the following shocks (demand or supply, permanent or temporary, positive or

negative) and use

AD-AS

curves to demonstrate their short-run and long-run effects on

output and inflation. Clarify the appropriate monetary policy response and its effects on

output and inflation.

i.

A technological breakthrough significantly enhances productivity

ii.

A major trading partner suffers a deep recession

iii. A country realises that its stock of minerals is significantly lower than what it had

previously estimated

iv.

The price of a key input into production rises for some time.