Figure 9.3
-Refer to Figure 9.3. Which of the following causes the economy to move from Point A to Point E in the short run?
A) an increase in the price level
B) technological progress
C) an influx of immigrants
D) an oil embargo that increases the price of oil sharply

Question

Figure 9.3
-Refer to Figure 9.3. Which of the following causes the economy to move from Point A to Point E in the short run?
A) an increase in the price level 
B) technological progress 
C) an influx of immigrants 
D) an oil embargo that increases the price of oil sharply

Quizplus · Accepted Answer

An oil embargo that increases the price of oil sharply would cause a decrease in aggregate supply, shifting the short-run aggregate supply curve to the left and leading to a higher price level and lower output in the short-run equilibrium at Point E.

Figure 9.3 -Refer to Figure 9.3. Which of the Following Causes the Causes