At the Beginning of 2015,a Country Is at Full-Employment

question 87

Multiple Choice

At the beginning of 2015,a country is at full-employment.During 2015,oil-producing countries decrease oil production leading to much higher oil prices.The higher oil prices can

• A)increase aggregate demand and lead to an expansion.
• B)increase aggregate supply and lead to an expansion.
• C)decrease aggregate demand and lead to a stagflation.
• D)decrease aggregate supply and lead to a stagflation.
• E)decrease aggregate demand and lead to a higher price level.

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Definitions:

Strike

A work stoppage caused by the mass refusal of employees to work, usually in protest against employment terms, working conditions, or other aspects of their contracts.