Answer to Question #90518 in Macroeconomics for Sung Eun Seok

Question

9. Other things being equal, a reorganization of the OPEC cartel to permit it to increase oil prices
by 70 percent would most likely have which of the following effects?
A. It would shift the aggregate demand curve to the right
B. It would shift the aggregate supply curve to the right
C. It would shift the aggregate supply curve to the left
D. It would shift the aggregate demand curve right and the aggregate supply curve left

Answer 1

(B) It would shift the aggregate supply curve to the right

Increase in price induces suppliers to increase quantity supplied