Suppose the Economy Is Initially in Equilibrium, and Then an Energy

Multiple Choice

Suppose the economy is initially in equilibrium, and then an energy shock occurs, such as when OPEC raised oil prices in the 1970s.In terms of inflation and unemployment, which of the following is likely to result?  

A)  Prices and unemployment will likely rise. 
B)  Prices and unemployment will likely fall. 
C)  Prices will rise and unemployment will likely fall. 
D)  Prices will fall and unemployment will likely rise.