In 2007 the U.S. was faced with two events. At the beginning of 2007, oil prices more than doubled…. Show more In 2007 the U.S. was faced with two events. At the beginning of 2007, oil prices more than doubled. A financial crisis hit the economy starting in August 2007 causing a reduction in consumer and business spending. These events led to a rise in the unemployment rate from 4.6% in 2007 to 5.5% by June 2008, with the inflation rate rising from 2.5% in 2006 to 5% in June 2008. Explain these events using the Aggregate Demand/Aggregate Supply Model. • Show less