The Long-Run Effect of an Increase in Oil Prices Is

question 174

Multiple Choice

The long-run effect of an increase in oil prices is a

• A)fall in potential GDP.
• B)lengthy recession until circumstances change and the aggregate demand curve shifts to the right.
• C)permanent increase in inflation.
• D)lengthy recession until the Fed changes monetary policy and the aggregate demand curve shifts to the right.
• E)downward movement of the inflation adjustment line until the rate of inflation returns to the baseline rate.

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Definitions:

Spectral Information

Refers to data obtained from measuring the response of a sample to varied wavelengths of electromagnetic radiation, used extensively in analysis and identification of compounds.

Carboxylic Acids

Organic acids characterized by the presence of at least one carboxyl group (-COOH), which imparts acidic properties to the molecule.

Resonance Stabilization

A concept in chemistry where the bonding in molecules or ions can be shown by several equivalent electron dot structures (resonance structures), leading to a stabilization of the molecule.

Carboxylate Ion

A negatively charged ion (anion) that results from the deprotonation of a carboxylic acid's hydroxyl group.