Figure 8-6 -Refer to Figure 8-6. Assume That the Economy Is Initially

question 24

Multiple Choice

Figure 8-6
-Refer to Figure 8-6. Assume that the economy is initially in long-run equilibrium. What happens if the price of oil, a key input, increases significantly in the economy?

• A) The long-run aggregate supply and the short-run aggregate supply curves shift left.
• B) The short-run aggregate supply curve shifts left.
• C) The aggregate demand and the short-run aggregate supply curves shift left.
• D) The long-run aggregate supply, the short-run aggregate supply, and the aggregate demand curves shift left.

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Definitions:

Maturation Of Coal

The process through which plant material is converted into coal over millions of years, increasing in carbon content and energy.

Methane

A greenhouse gas consisting of one carbon atom and four hydrogen atoms, commonly produced through anaerobic decomposition of organic material.

Impurities

Foreign substances within a material that can affect its properties, performance, or appearance.

Tar Sand

A sand or other sediment containing tar.