The Price of a Barrel of Oil Doubled Between 2007

question 10

Multiple Choice

The price of a barrel of oil doubled between 2007 and the middle of 2008.To make matters worse,a financial crisis hit the U.S.economy starting in August of 2007.Which of the following is an appropriate description of the mechanism that would have ensued?

• A)The increase in the price of oil would have immediately shifted the AS curve to the right.
• B)The financial crisis would have led to a sharp contraction in spending shifting the AD curve to the right.
• C)Shifts in both the AD and the AS curve would have ensued in the short-run but as long as neither shock had an impact on potential output,ultimately unemployment will have been unaffected in the long run.
• D)all of the above
• E)none of the above

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Definitions:

Life Partner

A person with whom one shares a long-term, committed relationship, often equivalent to a spouse but without legal formalities.

Facilitate Discussion

To guide or manage a conversation or debate in a way that encourages open exchange of ideas and opinions.

Critical Condition

A medical state indicating that a patient is in a life-threatening situation, requiring close and constant monitoring.

Communication Technique

Methods or strategies used to convey or exchange information effectively.