If the Price of Oil Rises, the

question 9

Multiple Choice

If the price of oil rises, the

• A)AD curve and the AS curve shift rightward, the price level rises, and real GDP decreases.
• B)AS curve shifts leftward, the price level rises, and real GDP decreases.
• C)AS curve shifts leftward, the price level rises, and real GDP increases.
• D)AD curve and the AS curve shift leftward, real GDP decreases, and the price level rises.
• E)AD curve shifts rightward, real GDP increases, and the price level rises.

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Definitions:

Entry of New Firms

The process by which new companies can enter an industry, often affecting competition levels, market share, and innovation.

Standardized Product

Goods or services that are uniform in quality and performance, making them interchangeable with similar products from different producers.

Pure Competition

A market structure characterized by an extremely large number of sellers, none of whom can control market prices or product quality, leading to a situation where products are homogeneous and businesses have no control over pricing.

U.S. Automobile Industry

A significant sector of the U.S. economy, involving the design, manufacture, and sale of motor vehicles within the United States.