If the U.S. government were to relax its restrictions on offshore oil well drilling and open drilling in Alaskan national parks, the result to aggregate supply would be to
A)cause a shift in the SRAS to the left.
B)cause a shift in the LRAS to the left.
C)cause no long-term shifts in AS.
D)cause a shift in both LRAS and SRAS to the right.

Question

Quizplus · Accepted Answer

Relaxing restrictions on offshore oil drilling and drilling in national parks would increase the production of oil, leading to an increase in aggregate supply in both the short run and the long run. This would shift both the SRAS and LRAS curves to the right, as the economy produces more output at every price level. Therefore, the correct answer is D, causing a shift in both LRAS and SRAS to the right.

If the US Government Were to Relax Its Restrictions on Offshore Oil