Recall the Application about falling oil prices and their effect on the U.S. economy to answer the following question(s).
-According to this Application, lower oil prices may affect
A) aggregate demand.
B) aggregate supply.
C) both aggregate demand and aggregate supply
D) neither aggregate demand and aggregate supply

Question

Quizplus · Accepted Answer

Lower oil prices can affect both aggregate demand and aggregate supply. Lower oil prices can increase aggregate demand through increased consumer spending due to lower fuel costs, as well as increased business investment due to lower energy costs. Lower oil prices can also increase aggregate supply through reduced production costs, leading to increased output and lower prices for goods and services.

Recall the Application About Falling Oil Prices and Their Effect