From 1985 to 1986, the average price of crude oil fell by almost half, from $24 a barrel to $12 a barrel. What effect did this input price drop have on the SRAS curve, and on the economy?

1. Oil is a key input across the economy, so a falling oil price lowers production costs broadly. 2. Lower input costs let firms profitably supply more output at every price level, shifting SRAS to the right. 3. A rightward SRAS shift moves equilibrium output up and the price level down, all else equal. 4. This played out as economic expansion, falling unemployment, and declining inflation. 5. Option A describes the opposite shift and its opposite consequences, so it reverses the actual outcome. _Source: OpenStax Principles of Macroeconomics for AP Courses (CC BY 4.0), Ch 10 "The Aggregate Demand/Aggregate Supply Model", section 10.3 | Shifts in Aggregate Supply_