Recall the Application About Oil Price Fluctuations in the U

question 25

Multiple Choice

Recall the Application about oil price fluctuations in the U.S. economy to answer the following
question(s) . During the 1970s, the world economy was hit with a series of supply shocks which impacted
the prices of oil and many agricultural commodities. Since the United States is a net importer of oil, the
changes in oil prices also had an impact on aggregate demand. During the 1990s, the world economy
experienced favorable supply shocks in the oil market, but in 2008, world oil prices skyrocketed to $145 a
barrel before falling again in 2009 and 2010.
-According to this Application, between 1997 and 1998, supply shocks had what simultaneous effect in the oil market?

• A)an increase in output and an increase in prices
• B)an increase in output and a decrease in prices
• C)a decrease in output and an increase in prices
• D)a decrease in output and a decrease in prices

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Definitions:

Selling And Administrative Expenses

Expenses related to the selling of products and the management of the business, not directly tied to manufacturing.

Noncurrent Assets

Noncurrent assets are long-term assets not expected to be converted into cash or used up within one year, such as property, plant, and equipment.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership stake of shareholders.

Working Capital

The difference between a company's current assets and current liabilities, indicating the amount of liquid assets available to run its operations.