A one- time increase in oil prices without any following change in aggregate demand produces
A) stagflation.
B) an increase in the money wage rate that exceeds the percentage increase in the price level.
C) a one- time fall in the price level.
D) demand- pull inflation.

Question

Quizplus · Accepted Answer

A one-time increase in oil prices can lead to stagflation, which is characterized by rising prices (inflation) and falling output (stagnation) due to increased production costs.

A One- Time Increase in Oil Prices Without Any Following