Which of the Following Was NOT a Reason Why OPEC

question 140

Multiple Choice

Which of the following was NOT a reason why OPEC failed to keep the price of oil high?

• A)over the long run, producers of oil outside of OPEC responded to high prices by increasing oil exploration and by building new extraction capacity
• B)consumers responded to higher prices with greater conservation
• C)consumers replaced old inefficient cars with newer efficient ones
• D)the agreement OPEC members signed allowed each country to produce as much oil as each wanted

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Definitions:

Short-Run Aggregate Supply Curve

A graphical representation showing how the total production of goods and services in an economy varies with changes in the price level in the short term.

Actual Price Level

The current index of prices for goods and services in an economy, reflecting the purchasing power of money at a specific point in time.

Long Run

A period in economics in which all factors of production and costs are variable, allowing full adjustment to changes.

Real Wages

Wages adjusted for inflation, representing the purchasing power of income earned through work.