Suppose a war in the Middle East destroys many oil fields. This will cause a(n)
A)redistribution of income from the rich to the poor.
B)increase in the quantity of oil traded.
C)increase in oil prices.
D)decrease in the demand for oil.
E)increase in the supply of oil.

Question

Quizplus · Accepted Answer

A war in the Middle East destroying oil fields would decrease the supply of oil, leading to an increase in oil prices as demand remains constant or potentially even increases due to higher reliance on remaining oil sources. This can lead to increased profits for oil-producing companies and potentially a transfer of wealth from oil-consuming countries to oil-producing countries. However, it is unlikely to lead to a redistribution of income from rich to poor or an increase in the quantity of oil traded.

Suppose a War in the Middle East Destroys Many Oil