Changes in the Price of Oil

question 117

Multiple Choice

Changes in the price of oil

• A)can only lead to recessions.
• B)have not contributed much to output fluctuations in the United States.
• C)change the economy principally by changing aggregate demand.
• D)created both inflation and recession in the United States in the 1970s.

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Definitions:

Cost

The amount of money or resources expended to obtain an asset, service, or achieve a specific outcome.

Annual Net Income

The total profit of a company after subtracting all expenses from revenue for one year.

Net Present Value Method

A financial analysis technique that discounts future cash flows to present value to assess the profitability of an investment or project.

Economic Life

This term refers to the expected period during which an asset remains useful to the owner or is expected to generate economic benefits.