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Oil prices have risen temporarily due to political uncertainty in the Middle East. An advisor suggests higher oil prices reduce aggregate supply. To offset this they must increase the money supply. Then  the price  level  won’t  need to adjust  to restore  equilibrium  and they will  prevent  a recession.   It is a role of every govement to smooth the business cycle.  Every  economy  faces  different challenges  i ...

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Tags: Australia Sydney Economics Economics Business economics University of Sydney Business Economics PM101 

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