If Oil Prices Increase, Then in the Short Run, Real

question 10

Multiple Choice

If oil prices increase, then in the short run, real GDP will ________ and the price level will ________.

• A) increase; rise
• B) increase; fall
• C) decrease; rise
• D) decrease; fall

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Definitions:

Seasonality

Periodic fluctuations in economic or financial activity that recur with similar intensity during the same season of each year.

U.S. GDP

The total market value of all final goods and services produced within the United States in a given period, serving as a broad measure of overall economic activity.

Circular Flow Diagram

A visual model of the economy that shows how money flows through markets among households and firms, illustrating economic interactions.

Payments

Transactions or transfers of money or equivalents as a form of settling a debt or fulfilling an obligation.