An Increase in the Price of a Resource Such as Oil

question 230

Multiple Choice

An increase in the price of a resource such as oil
I. shifts the aggregate demand curve leftward.
II. shifts the long-run aggregate supply curve rightward.
III. shifts the short-run aggregate supply curve leftward.
IV. increases the price level and decreases real GDP in the short run.

• A) Only I is correct.
• B) Only III is correct.
• C) Both III and IV are correct.
• D) Both I and II are correct.

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Definitions:

Offshoring

Relocation of business processes to lower-cost locations overseas.

Partnership

A type of business organization where two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Agreement.

Specific Undertaking

A Specific Undertaking refers to a particular project or task that is distinctly defined within the scope of work or agreement.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task, which could be a new project or any other business activity.