Shocks (20 points)

Subject:EconomicsPrice: Bought3

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Shocks (20 points). In the table below, classify the following developments as shocks to aggregate

supply (AS) or aggregate demand (AD) and show whether they are stimulative (+) or

restrictive (-) with respect to output and with respect to prices.

1. Oil price surge

2. Equity market crash

3. Heightened fear of job losses

4. Deregulation of airlines, finance and telecommunications

5. Fed increases interest rate paid on reserves

6. Improved inventory control

7. Government limits workweek

8. Better information technology is developed

9. Fed embarks on quantitative easing

10. COVID-19 pandemic

Shock Type of Shock Output Effect Price Effect

Oil Price Surge

Equity Crash

Heightened Fear of Job Losses

Deregulation

Fed increases interest paid on reserves

Improved inventory control

Government limits workweek

Better information technology

Fed embarks on quantitative easing

COVID-19 pandemic