SSE $104$ In$-$class exercise

Business Cycle, AD$-$AS model

$1.$ Illustrate and explain the effect of each of the following events on the equilibrium

a$.$ Tensions in the middle east raises the price of oil.

b$.$ A new immigration law increases the size of working population

c$.$ Long$-$term on$-$the$-$job training program has successfully increased the proportion of skilled workers.

$2.$ Illustrate and explain the effect of each of the following events on the equilibrium

a$.$ Stock market crashed in $2001$ following the burst of high$-$tech bubbles.

b$.$ President Bush declared an income tax cut in $2002$ and $2003.$

c$.$ The Fed lowered the interest rates.