A recent study revealed that the consumption of coffee is injurious to health.This led to a sharp decline in coffee consumption worldwide.If coffee production accounts for 40 percent of Richland's GDP,this will lead to a(n)________.
A) increase in the real interest rate in Richland
B) fall in Richland's demand for labor
C) rise in Richland's demand for labor
D) rise in Richland's inflation rate

Question

Quizplus · Accepted Answer

The sharp decline in coffee consumption worldwide will lead to a fall in Richland's demand for labor as there will be a decrease in the demand for workers involved in coffee production, which accounts for 40 percent of Richland's GDP. This can lead to an increase in unemployment, and a fall in the prices of coffee beans may also affect the wealth of coffee producers, leading to a decrease in consumption in the economy. The other options are not directly related to the decline in coffee consumption.

A Recent Study Revealed That the Consumption of Coffee Is