Problem
In early 2008, the price of oil on the world market increased, hitting a peak of about $140 per barrel in July 2008. In the second half of 2008, the price of oil declined, ending the year at just over $40 per barrel. Suppose that the global market for oil can be described by an upwardsloping supply curve and a downward-sloping demand curve. For each of the following scenarios, illustrate graphically how the exogenous event contributed to a rise or a decline in the price of oil in 2008:
a) A booming economy in China raised the global demand for oil to record levels in 2008.
b) As a result of the financial crisis of 2008, the United States and other developed economies plunged into a severe recession in the latter half of 2008.
c) Reduced sectarian violence in Iraq in 2008 enabled Iraq to increase its oil production capacity.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.