What Was One Result of the Inflation Associated with the Oil

question 3

Multiple Choice

What was one result of the inflation associated with the oil embargoes of the 1970s?  

• A) reduced unemployment because aggregate demand increased 
• B) reduced unemployment because aggregate demand fell 
• C) increased unemployment because aggregate demand increased 
• D) increased unemployment because aggregate supply fell

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Definitions:

Equal Installments

Equal installments refer to payments of the same amount made periodically over the term of a loan or financing agreement.

Interest

The charge for borrowing money or the return on invested capital.

Nominal Annual Rate

The stated or face interest rate of a financial product, not adjusting for compounding or inflation over time.

Effective Annual Rate

This is the interest rate on an investment or loan that accounts for the effects of compounding over a given period, providing a more accurate picture of financial returns or costs.