In the Spring of 2016 There Was a Severe Forest

question 203

Multiple Choice

In the spring of 2016 there was a severe forest fire in Alberta, which forced the evacuation of Fort McMurray and the shut down of many oil sands operations.As a result, there was less crude oil produced in Alberta than normal.At the pre-fire equilibrium price (i.e., at the initial equilibrium price) , we would expect to see

• A)a surplus of gasoline.
• B)the quantity demanded equal to the quantity supplied.
• C)a shortage of gasoline.
• D)an increase in the demand for gasoline.

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Definitions:

Bonds

Debt securities issued by entities such as governments or corporations to raise capital, promising to repay the principal along with interest at a future date.

Private Saving

The portion of households' income that is not consumed or paid in taxes, and is instead saved.

Investment

The action of allocating resources, usually money, with the expectation of generating an income or profit, often through the purchase of assets that are expected to increase in value.

Private Saving

The portion of individual or household income that is not consumed or taxed, often saved or invested for future use.