Stabilizing commodity prices around long-term trends tends to benefit exporters at the expense of importers in markets characterized by:
A) Demand-side disturbances
B) Supply-side disturbances
C) Demand-side and supply-side disturbances
D) None of the above

Question

Quizplus · Accepted Answer

Stabilizing commodity prices around long-term trends tends to benefit exporters at the expense of importers in markets characterized by supply-side disturbances. This is because supply-side disturbances often result in temporary disruptions in supply, which can cause prices to fluctuate wildly in the short-term. By contrast, stabilizing prices around long-term trends helps to smooth out these short-term fluctuations, which benefits exporters who can rely on more stable prices for their exports. Importers, on the other hand, may find it more difficult to adjust to these stable prices, especially if they are used to dealing with more volatile markets. Demand-side disturbances, which are disruptions in demand, do not necessarily have the same impact on commodity prices as supply-side disturbances, so option A is incorrect. Option C is also incorrect, as neither demand-side nor supply-side disturbances alone can account for the benefits and drawbacks of stabilizing commodity prices. Option D is incorrect as it does not provide a valid explanation.

Stabilizing Commodity Prices Around Long-Term Trends Tends to Benefit Exporters