A Temporary Decrease in the Price of Oil Is A

question 59

Multiple Choice

A temporary decrease in the price of oil is a:

• A) short-run supply shock.
• B) long-run supply shock.
• C) demand shock.
• D) The changing price of oil would not influence aggregate demand or supply.

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Definitions:

Theory of Profit

An economic theory that analyzes the dynamics of profit in the market economy, focusing on how profit is generated and distributed.

Entrepreneur

An individual who creates, organizes, and operates a business or businesses, taking on greater than normal financial risks in order to do so.

Present Value

The present value of a future amount of money or series of cash flows, taking into account a particular rate of return.

Rate of Interest

The percentage of a sum of borrowed money that is paid by the borrower to the lender for the use of that money for a certain period.