Hurricane Katrina caused the price of oil to increase. This is an example of

Question

Quizplus · Accepted Answer

The increase in oil prices was a result of the operations of supply and demand. Hurricane Katrina disrupted the supply of oil in the Gulf of Mexico region, leading to a decrease in supply. However, demand for oil remained the same, causing the price to increase due to the limited availability. This is a classic example of supply and demand at work. Inflation and deflation refer to the overall rise or fall in price levels across an economy, while sustained inflation refers to a persistent increase in prices over a prolonged period.

Hurricane Katrina Caused the Price of Oil to Increase