Question

Assume that the economy is in​ long-run equilibrium. ​Now, assume that there is an unexpected increase in the price of oil. As a result of higher oil​ prices, the A. ​short-run aggregate supply curve will shift left. B. ​long-run aggregate supply curve will shift left. C. ​short-run aggregate supply curve will shift right. D. aggregate demand curve will shift left. The new​ short-run equilibrium will be

Answer 1

The correct answer is D)

The aggregate demand curve will shift left.

Aggregate supply is stimulated only by labour, capital, and technology.

Equilibrium refers to the price point where demand or supply intersect.

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