Recall the Discussion About the Demand for Oil in Your

question 150

Multiple Choice

Recall the discussion about the demand for oil in your textbook. Which of the following correctly explains why the demand curve for oil is negatively sloped? As the price of oil rises:

• A) consumers use oil for more and varied purposes.
• B) consumers increasingly use oil only for those purposes without good substitutes.
• C) consumers have an incentive to use oil more freely.
• D) more producers are more willing and able to produce oil.

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Definitions:

Serious Inflation

An extreme form of inflation characterized by rapid and uncontrollable rises in prices across the economy.

Supply-Side Economists

Economists who believe that reducing taxes and decreasing regulation will lead to an increase in production and economic growth.

Laffer Curve

A theoretical representation showing the relationship between tax rates and the amount of tax revenue collected by governments.

Tax Cuts

Reductions in the amount of taxes imposed by the government, often to stimulate economic growth or increase disposable income.