Oil price level that economists say would herald a recession if sustained for weeks?

• A. 120
• B. 138
• C. 100
• D. 150

Answer: (B)

The idea being tested is how a sustained spike in oil prices can push the economy toward recession. When oil prices stay high for weeks, households end up paying more for energy, which reduces real purchasing power and lowers spending on other goods and services. At the same time, businesses face higher input costs, which can weigh on hiring, investment, and production. That combination—weaker demand and higher costs—can slow economic growth enough to tip an economy into recession if the shock persists.

The specific level of 138 dollars per barrel is treated as a warning threshold: high enough that, if kept for weeks, the drag from energy costs on consumer spending and business activity becomes pronounced. Lower levels like around 100 or 120 are significant but not as reliably associated with recession risk in the same sustained way, while a level as extreme as 150 would indicate an even more severe shock. Thus, 138 is used here as the benchmark for a recession-signaling oil-price level sustained over time.