Suppose that an increase in world oil prices leads to an increase in Canadian aggregate demand but no change in Canadian aggregate supply.The short-term effect on the Canadian price level would be called

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Quizplus · Accepted Answer

An increase in world oil prices would likely lead to an increase in Canadian demand for oil, which would increase the cost of production and potentially increase prices for other goods and services as well. This is a demand-pull inflationary effect, where increased demand leads to higher prices. The other options are not relevant to this scenario.

Suppose That an Increase in World Oil Prices Leads to an Increase