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(Solution) - China experienced many negative effects of the U S recession of

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China experienced many negative effects of the U.S. recession of 2007?2009. Like the United States, China was faced with higher oil prices. Unlike the U.S. case, housing prices in China did not fall. However, China?s exports fell sharply as the recession lowered incomes in the United States and other trading partners. Assume that China was producing at potential GDP prior to the recession. Use the IS?MP model including the Phillips curve to show the effects of the recession in China.

 







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This question was answered on: Jul 11, 2017

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