Article Summary
According to the International Energy Agency (IEA), increased oil production resulting from U.S. shale oil has invigorated the North American oil industry and has created a global supply shock. The shale oil and gas industry has generated tens of billions of dollars in revenues and hundreds of thousands of new jobs, and could result in the United States changing from being the world's largest oil importer to a net exporter within a few years. An IEA forecast predicts that because of shale oil, the United States will become the world's largest oil producer by 2017, with supply growing by 3.9 million barrels per day from 2012-2018.
Source: Denise Roland, and AFP, "US shale energy creates global oil 'supply shock'," Telegraph, May 14, 2013.

-Refer to the Article Summary.The supply shock mentioned in the article summary may well result in a decrease in the price of oil.When the price of oil falls unexpectedly,the equilibrium price level ________ and the unemployment rate ________ in the short run.
A)rises; falls
B)rises; rises
C)falls; falls
D)falls; rises

Question

Article Summary
According to the International Energy Agency (IEA), increased oil production resulting from U.S. shale oil has invigorated the North American oil industry and has created a global supply shock. The shale oil and gas industry has generated tens of billions of dollars in revenues and hundreds of thousands of new jobs, and could result in the United States changing from being the world's largest oil importer to a net exporter within a few years. An IEA forecast predicts that because of shale oil, the United States will become the world's largest oil producer by 2017, with supply growing by 3.9 million barrels per day from 2012-2018.
Source: Denise Roland, and AFP, "US shale energy creates global oil 'supply shock'," Telegraph, May 14, 2013.

-Refer to the Article Summary.The supply shock mentioned in the article summary may well result in a decrease in the price of oil.When the price of oil falls unexpectedly,the equilibrium price level ________ and the unemployment rate ________ in the short run.
A)rises; falls
B)rises; rises
C)falls; falls
D)falls; rises

Quizplus · Accepted Answer

A decrease in oil prices typically leads to a lower equilibrium price level and can stimulate economic activity, reducing unemployment in the short run.