Refer to the above figure. Assume that B is the current long-run aggregate supply (LRAS) curve and E is the current short-run aggregate supply (SRAS) curve.

If a 90-day embargo of oil from the Middle East to the United States were announced, and if after that 90-day period oil prices were expected to return to normal pre-embargo prices, then you would expect A) the LRAS and the SRAS to remain at B and E, respectively.
B) the LRAS to remain at B, but the SRAS to shift to D.
C) the LRAS to remain at B, but the SRAS to shift to F.
D) the LRAS to shift to C, and the SRAS to shift to F.

ANSWER:

B