If oil, which is a major input to most production processes, abruptly in price, the impact on the economy would be similar to a productivity decrease, with a resultant decrease in real GDP.
Given an incomplete sentence related to oil which is a major input in the production of goods.
We are required to fill the sentence with the appropriate effect.
When there is increase in the prices of oil there will be increase in cost of the production and there will be decrease in supply of goods and as a result real GDP also decreases.
Real GDP is basically the GDP which is measured on the basis of prices of previous year.It reflects change in units of product and neglect the increase in prices of products.
Hence if oil, which is a major input to most production processes, abruptly in price, the impact on the economy would be similar to a productivity decrease, with a resultant decrease in real GDP.
Learn more about real GDP at brainly.com/question/24156212
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