An increase in the price of oil should cause the short-run aggregate supply curve to:
A)Shift to the right
B)Become vertical
C)Become horizontal
D)Shift to the left

Question

Quizplus · Accepted Answer

An increase in the price of oil would increase production costs for firms that use oil as an input, causing a decrease in their output levels. This would result in a leftward shift of the short-run aggregate supply curve.

An Increase in the Price of Oil Should Cause the Short-Run