If people suddenly start to expect the price of oil to rise less rapidly than the interest rate, the demand for oil _______ and the supply of oil _______.

Question

Quizplus · Accepted Answer

If people expect the price of oil to rise less rapidly than the interest rate, they would be less inclined to hold onto oil as an investment, leading to decreased demand. Meanwhile, suppliers might increase production or release reserves to sell at current prices before the value decreases relative to the cost of holding it (due to higher interest rates), thus increasing supply.

If People Suddenly Start to Expect the Price of Oil