Refer to the information provided in Figure 12.4 below to answer the questions that follow.
Figure 12.4
-Refer to Figure 12.4.Suppose the economy is at Point A,an oil price increase could move the economy to Point
A)E.
B)B.
C)C.
D)D.

Question

Refer to the information provided in Figure 12.4 below to answer the questions that follow.
  Figure 12.4
-Refer to Figure 12.4.Suppose the economy is at Point A,an oil price increase could move the economy to Point
A)E. 
B)B. 
C)C. 
D)D.

Quizplus · Accepted Answer

An oil price increase will lead to a decrease in aggregate supply, shifting the AS curve to the left. This will cause the economy to move from Point A to Point E, where the price level is higher and real GDP is lower.

Refer to the Information Provided in Figure 12