If the price of crude oil decreased, then this would most likely
A) decrease aggregate supply in the U.S.
B) increase aggregate supply in the U.S.
C) increase aggregate demand in the U.S.
D) decrease aggregate demand in the U.S.

Question

Quizplus · Accepted Answer

A decrease in the price of crude oil would decrease production costs for firms, which would lead to lower prices for consumers and an increase in purchasing power. This would lead to an increase in aggregate supply in the U.S. as firms would be willing to supply more goods and services at the lower cost.

If the Price of Crude Oil Decreased, Then This Would