The Prices of Certain Goods, Such as Ice and Gasoline

question 64

Multiple Choice

The prices of certain goods, such as ice and gasoline, often increase after a natural disaster such as a hurricane. The economic explanation for this observation is that

• A) people panic in disaster situations.
• B) disasters bring out the worst in people.
• C) the disaster temporarily reduces the supply of the goods and increases the demand for the goods.
• D) the disaster temporarily reduces the supply of the goods and reduces the demand for the goods.

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Definitions:

Supply-Side Economics

An economic theory proposing that by lowering taxes and reducing regulations to stimulate production, economic growth is achievable.

Aggregate Supply

The overall volume of goods and services that companies in a nation expect to provide for purchase during a certain timeframe.

Government Policies

Guidelines, regulations, or laws implemented by a government to influence the economy or meet social goals.

Tax Cut

A Tax Cut is a reduction in the amount of taxes that individuals or corporations are required to pay to the government, often aimed at stimulating economic growth.