Major increases in oil prices in the mid-1970s and in the late 1970s created:
A) an increase in long-run aggregate supply.
B) a reduction in the unemployment rate.
C) adverse aggregate supply shocks.
D) beneficial aggregate demand shocks.

Question

Quizplus · Accepted Answer

The major increases in oil prices during the 1970s led to adverse aggregate supply shocks, as higher oil prices increased production costs and reduced the overall supply of goods and services in the economy.

Major Increases in Oil Prices in the Mid-1970s and in the Late