Oil is an important input into the NZ production of petrol.

The main immediate impact of an oil price increase is that (? ) [consumption, investment, government spending, exports, imports, raw material costs, wage costs)] would ( ? ).

[increase, decrease]

This would shift the ( ? )

[aggregate demand curve left, aggregate demand curve right, short run aggregate supply curve left, short run aggregate supply curve right, long run aggregate supply curve left, long run aggregate supply curve right ] which ( ? )

[increases the price level, decreases the price level] and ( ? ).

[increases GDP, decreases GDP]

Suppose that the economy is now away from long run equilibrium.The way that the economy adjusts back to equilibrium is that ( ? )

[ interest rates, the exchange rate, factor prices such as wages, government spending] ( ? ).

[increase(s) decrease(s)] This shifts the ( ? )

[ aggregate demand curve left, aggregate demand curve right, short run aggregate supply curve left, short run aggregate supply curve right, long run aggregate supply curve left, long run aggregate supply curve right.]