Which of the following changes best represents the effect of the ...

[dalyningkenk]

Which of the following changes best represents the effect of the oil embargo (a shut-off of oil from certain OPEC countries) of the 1970s on the U.S.?
 a. A leftward shift of the long-run aggregate supply curve
 b. A rightward shift of the long-run aggregate supply curve
 c. A leftward shift of the aggregate demand curve
 d. A rightward shift of the aggregate demand curve
 e. A rightward movement along a given aggregate demand curve

Question 2

An increase in aggregate demand will have a smaller long-run effect on real GDP if the:
 a. aggregate demand curve is flat.
 b. short-run aggregate supply curve is horizontal.
  c. economy is well below potential output.
 d. economy is already at potential output.
 e. aggregate demand curve is fairly steep.

[lkanara2]

Answer to Question 1

a

Answer to Question 2

d