Suppose an Increase in Oil Prices Is Accompanied by a Decline

question 44

Multiple Choice

Suppose an increase in oil prices is accompanied by a decline in the level of potential output.Which of the following is the most likely long-run effect?

• A)real GDP will decrease but prices will increase
• B)real GDP and prices will both decline
• C)real GDP will remain the same but prices will increase
• D)real GDP will remain the same but nominal GDP will decrease
• E)the unemployment rate and prices will both decrease

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Definitions:

Online Exchanges

Digital platforms that facilitate the buying and selling of goods or services among businesses or consumers.

Supply Chain

A network of organizations, people, activities, information, and resources involved in creating and moving a product or service from suppliers to customers.

Vendor Evaluation

The process of assessing and reviewing suppliers based on their price, quality, reliability, and service to select the best vendors for a business.