open economy

Consider the open economy displayed in the figure below. Firms in this nation do import raw materials and other productive inputs from​ ;abroad, and foreign residents purchase many of the​ ;nation’s goods and services.

a. Using the three ;point ;curved ;line ;drawing ;tool​, determine the most likely​ ;short-run effect on this​ ;nation’s economy if there is a significant raw ;materials ;price inflation in other nations around the world. Label this line​ ;’Shock’.

Carefully follow the instructions​ ;above, and only draw the required objects.