When OPEC Nearly Tripled the Price of Oil in Late

question 65

Multiple Choice

When OPEC nearly tripled the price of oil in late 1973,

• A)U.S.real GDP increased as profits by oil producers increased.
• B)U.S.real GDP did not change although the price level rose.
• C)the U.S.price level fell because production became too expensive.
• D)the U.S.price level rose and real GDP decreased.
• E)both U.S.real GDP and the price level increased.

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Definitions:

Fixed Inputs

Resources or factors of production that cannot be increased or decreased in the short run, often including capital and land.

Cross Elasticity

A measure of how the quantity demanded of one good responds to a change in the price of another good, indicating the substitutability or complementarity between the two goods.

Coffee

A popular beverage made from roasted and ground beans of the Coffea plant, consumed for its stimulating effects.

Tea

Tea is a beverage made by pouring hot or boiling water over cured or fresh leaves of the Camellia sinensis plant, traditionally consumed hot but also enjoyed cold.