During 2003-2007, the Price of Crude Oil Increased Substantially on the World

Multiple Choice

During 2003-2007, the price of crude oil increased substantially on the world market. Other things constant, how will an unanticipated increase in oil prices influence the general level of prices and real output of oil-importing nations such as the United States and Japan?

A) Both real output and the general level of prices will decrease.
B) Both real output and the general level of prices will increase.
C) Real output will increase, and the general level of prices will decrease.
D) Real output will decrease, and the general level of prices will increase.