If oil prices increase then, in the short run, real GDP will ________ and the price level will________.
A)decrease; rise
B)decrease; fall
C)increase; fall
D)increase; rise

Name: If oil prices increase then, in the short run, real GDP will ________ and the price level will________. A)decrease; rise B)decrease; fall C)increase; fall D)increase; rise
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Question

Quizplus · Accepted Answer

An increase in oil prices raises production costs, leading to a decrease in real GDP and an increase in the price level due to higher inflation.

If Oil Prices Increase Then, in the Short Run, Real