(Solved): Ireland's economy is in both short-run and long-run equilibrium, as shown in the graph below. Assum ...

Ireland's economy is in both short-run and long-run equilibrium, as shown in the graph below. Assume the countries of OPEC enter into a price war, causing the price of oil to decrease. a. Show the effect on the short-run equilibrium from a decrease in oil prices. Using the graph, draw either the new AD curve or new AS curve resulting from this price change. Instructions: Use the tool provided "New Curve" to plot the appropriate line. After placing the curve, click on "Select" and choose whether to label the curve "AD 1 " or "AS 1 " from the dropdown menu. $AD$ and $AS$ in Ireland (i) b. In the long run, the real GDP to will shift to the , bringing the economy back to the long-run equilibrium at the full-employment level of output. and bringing the economy back to the long-run equilibrium at the full-employment levelof output.