Country X is the largest producer and exporter of oil in the world.Which of the following is likely to happen if the world demand for oil increases?
A) Country X's labor supply curve will shift to the left.
B) Country X's labor demand curve will shift to the right.
C) Consumption expenditure in Country X will fall.
D) Asset prices in Country X will fall.

Question

Quizplus · Accepted Answer

If the world demand for oil increases, the price of oil is likely to rise, resulting in an increase in revenue for Country X's oil industry. As a result, the demand for labor in the oil industry is likely to increase, leading to a rightward shift in the labor demand curve. None of the other options are likely to occur as a result of an increase in world demand for oil.

Country X Is the Largest Producer and Exporter of Oil