Refer to the information provided in Figure 11.4 below to answer the questions that follow. Figure 11.4
-Refer to Figure 11.4. Which of the following causes the economy to move from Point A to Point E?
A) an oil embargo that increases the price of oil
B) technological progress
C) an influx of immigrants
D) an increase in the price level

Question

Refer to the information provided in Figure 11.4 below to answer the questions that follow.  Figure 11.4
-Refer to Figure 11.4. Which of the following causes the economy to move from Point A to Point E?
A) an oil embargo that increases the price of oil 
B) technological progress 
C) an influx of immigrants 
D) an increase in the price level

Quizplus · Accepted Answer

An oil embargo that increases the price of oil would increase production costs for firms, leading to a decrease in aggregate supply and an increase in equilibrium price level. This would cause a decrease in real GDP and a movement from Point A to Point E on the AD-AS model.

Refer to the Information Provided in Figure 11