The Short-Run Effect of an Oil Price Increase Is

question 125

Multiple Choice

The short-run effect of an oil price increase is

• A)an upward shift of the inflation adjustment line and a leftward shift of the aggregate demand curve as the Fed raises interest rates.
• B)an upward shift of the inflation adjustment line and a leftward shift of the aggregate demand curve as the Fed lowers the target inflation rate.
• C)an upward shift of the inflation adjustment line and a leftward shift of the aggregate demand curve as spending falls.
• D)a downward shift of the inflation adjustment line.
• E)an upward shift of the inflation adjustment line.

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