In the summer of 2008 global oil prices spiked to extremely


Question: In the summer of 2008, global oil prices spiked to extremely high levels before coming down again at the end of that year. This temporary event had global effects, because oil is an important resource in the production of many goods and services. Focusing only on the U.S. economy, determine how this kind of event affects the price level, unemployment rate, and real GDP in both the short run and the long run. Assume the economy was in long-run equilibrium before this change and consider only this stated change.

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Finance Basics: In the summer of 2008 global oil prices spiked to extremely
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