If oil prices increase,then in the short run,real GDP will ________ and the price level will ________.
A)increase;rise
B)increase;fall
C)decrease;rise
D)decrease;fall
E)not change;rise

Question

Quizplus · Accepted Answer

An increase in oil prices typically leads to an increase in production costs for firms, causing them to produce less and decreasing real GDP. Additionally, higher production costs can lead to higher prices for goods and services, thus increasing the price level.

If Oil Prices Increase,then in the Short Run,real GDP Will