In the early 2000s the European Central Bank warned that higher oil prices were a threat to economic growth. The Bank President called the higher prices "a sizeable adverse shock" to the economy. In terms of the AS/AD framework, this shock would be represented as a shift:
A. right of the AD curve.
B. down (to the right) of the AS curve.
C. up (to the left) of the AS curve.
D. left of the AD curve.
Answer: C
Economics
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