If the price of crude oil decreases, then this would most likely:
A) Decrease aggregate supply in the U.S.
B) Increase aggregate supply in the U.S.
C) Increase aggregate demand in the U.S.
D) Decrease aggregate demand in the U.S.

Question

Quizplus · Accepted Answer

A decrease in the price of crude oil will likely decrease production costs for firms that use oil as an input, thus increasing profitability and the ability to supply goods and services at a lower cost. This will lead to an increase in aggregate supply in the U.S.

If the Price of Crude Oil Decreases, Then This Would