Illustrate what happens when economic growth boosts world demand in the short run in the long run as producers invest in new oil wells in the long run as consumers find substitutes for oil Similarly, describe the short and long-run consequences of a negative supply shock similar to the 1970s shock. If you observed an oil price rise, how in principle could you tell whether it was driven by supply-side or demand-side developments

Feedback systems do not always involve negative feedback. economic inflation, which is evidenced by continually rising prices, is a positive feedback system. a positive feedback control system, as shown on the right, adds the feedback signal to the input signal, and the resulting signal is used as the input to the process. a simple model of the price-wage inflationary spiral is shown on the right. add additional feedback loops, such as legislative control or control of the tax rate, to stabilize the system. it is assumed that an increase in workers’ salaries, after some time delay, results an increase in prices. under what conditions could prices be stabilized by falsifying or delaying the availability of cost-ofliving data? how would a national wage and price economic guideline program affect the feedback system?