One Reason the U

question 119

Multiple Choice

One reason the U.S.government might subsidize research of an alternative to crude-oil based gasoline is that

• A) more substitutes will reduce the price of crude-oil based gasoline.
• B) more substitutes will increase the elasticity of crude-oil based gasoline.
• C) more substitutes will reduce the impact of supply shocks on the price of crude-oil based gasoline.
• D) Any or all of the above.

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Definitions:

Price Changes

Variations in the price level of goods and services over time, affecting purchasing power and inflation rates.

Gains and Losses

The financial increases (gains) or decreases (losses) in the value of an asset or investment from its purchase price, typically realized when the asset is sold.

Floating-Rate Debt

A type of debt instrument or loan whose interest payment varies with market interest rates.

Fixed-Rate Debt

A loan or security that has an interest rate that remains constant throughout the life of the loan, providing predictable repayment schedules.