![In a small open economy, is a negative supply shock or a negative demand shock more damaging for medium-run output? Explain in words and use AD-EDU diagrams to back up your argument. In a small open economy, is a negative supply shock or a negative demand shock more damaging for medium-run output? Explain in words and use AD-EDU diagrams to back up your argument.](https://homework.study.com/cimages/multimages/16/srac2s3441965401512324607.jpg)
In a small open economy, is a negative supply shock or a negative demand shock more damaging for medium-run output? Explain in words and use AD-EDU diagrams to back up your argument.
![TheMoneyIllusion » Did a supply shock cause the Canadian recession? And did tight money make it worse? TheMoneyIllusion » Did a supply shock cause the Canadian recession? And did tight money make it worse?](http://www.themoneyillusion.com/wp-content/uploads/2013/03/AS-AD-e1362682543880.png)
TheMoneyIllusion » Did a supply shock cause the Canadian recession? And did tight money make it worse?
![Using the AS-AD model, explain what happens when a permanent negative supply shock hits the economy. | Homework.Study.com Using the AS-AD model, explain what happens when a permanent negative supply shock hits the economy. | Homework.Study.com](https://homework.study.com/cimages/multimages/16/ad-as_model5396660993787037584.png)