An increase in oil prices will shift the aggregate: A

Economics Dec 12, 2020

An increase in oil prices will shift the aggregate:

A. Demand curve leftward

B. Demand curve rightward

C. Supply curve leftward

D. Supply curve rightward

E. Both A and C

Expert Solution

The answer is: C. Supply curve leftward. An increase in oil prices will shift the aggregate supply curve leftward. Conversely, a decline in prices represents a positive supply shock, which will shift the curve to the right, providing an incentive for more oil to be to be produced at every price level.

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