For the economy of Canada, a major oil user and exporter, a decrease in the world price of oil would be considered

Question

Quizplus · Accepted Answer

A decrease in the world price of oil would result in a decrease in demand for Canadian oil exports, leading to a negative demand shock. However, it would also lead to a decrease in the cost of production for Canadian companies that use oil as an input, resulting in a positive supply shock. Therefore, it is both a negative demand shock and a positive supply shock.

For the Economy of Canada, a Major Oil User and Exporter