Multiple Choice
Suppose OPEC is unable to come to an agreement regarding oil production and as a result the price of oil drops. Which of the following would you expect to occur as a result of this favorable supply shock?
A) The short-run Phillips curve will shift to the right and the unemployment rate will increase.
B) The short-run Phillips curve will shift to the right and the unemployment rate will decrease.
C) The short-run Phillips curve will shift to the left and the unemployment rate will increase.
D) The short-run Phillips curve will shift to the left and the unemployment rate will decrease.
Correct Answer:
Verified
Correct Answer:
Verified
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