(Figure: Real Output Shock) This figure shows how real output growth reacts to a shock of a 10 percent increase in the price of new oil. How long does it take for the economy to return to normal?

Question

(Figure: Real Output Shock)  This figure shows how real output growth reacts to a shock of a 10 percent increase in the price of new oil. How long does it take for the economy to return to normal?

Quizplus · Accepted Answer

It takes approximately two and a half years for the economy to return to normal after a shock of a 10 percent increase in the price of new oil.

(Figure: Real Output Shock) This Figure Shows How Real