What might happen to aggregate supply curve if there was a significant increase in the cost of foreign oil?

1 Answer

Answer :

The aggregate supply curve shifts to the left as the price of key inputs rises, making a combination of lower output, higher unemployment, and higher inflation possible. When an economy experiences stagnant growth and high inflation at the same time it is referred to as stagflation.

Related questions

Description : According to the aggregate supply curve, what happens as the price level increases?

Last Answer : Firms have more of an incentive to increase output.

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Last Answer : (a) Point of interaction of aggregate demand and aggregate supply curve;

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Last Answer : (b) A decrease in interest rate

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Last Answer : I don’t know much about economics, but the third option is that the effects might cancel out, meaning no change.

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Last Answer : (b) If aggregate supply is completely inelastic

Description : Given the supply quantity which is fixed an increase in aggregate demand will have direct impact on (a) Increase in GDP ; (b) Inflationary pressure ; (c) Greater employment opportunity; (d) More equitable distribution of income and wealth 

Last Answer : (b) Inflationary pressure ;

Description : Change in cost of production of the concerned goods causes (a) The demand curve to shift ; (b) The supply curve to shift ; (c) Increase in quantity demanded; (d) Decrease in quantity supplied 

Last Answer : (b) The supply curve to shift ;

Description : Going from left to right on the aggregate demand curve, real GDP _____.?

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Last Answer : (c) Total tax burden and total payment burden.

Description : Pick up the correct statement from the following: (A) Continuous grading is not necessary for obtaining a minimum of air voids (B) The omission of a certain size of aggregate is shown by ... in concrete increases the workability but also increases the liability to segregation (D) All the above

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Description : What is aggregate supply exceeds aggregate demand what is likely to result?

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Description : Concern about an international crisis has caused consumers to save their money and postpone big purchases. What is the effect on aggregate demand and aggregate supply?

Last Answer : aggregate demand will decrease, lowering both real GDP and the price level

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Last Answer : (2) less than aggregate demand Explanation: If the supply is less than the demand, the price will increase. Inflation, the persistent increase in the average price level, can be ... Translating this to the macro-economy suggests that inflation occurs when aggregate demand exceeds aggregate supply.

Description : When aggregate supply exceeds aggregate demand - (1) unemployment falls (2) prices rise (3) inventories accumulate (4) unemployment develops

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Description : Which of these is not a determinant of aggregate supply (a) Quantity demanded ; (b) Price of the product under consideration ; (c) Relative price of other goods ; (d) Future expectations about prices 

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Last Answer :  less than aggregate demand

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Description : an increase in taxes on labor income shifts the labor supply curve ________ and the ________. -General Knowledge

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Description : Movement along the same demand curve is know as - (1) Extension and Contraction of Demand (2) Increase and Decrease of Demand (3) Contraction of supply (4) Increase of supply

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Last Answer : (a) Horizontal line at a price that is equal to the long run minimum average cost of production; 

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