When there is a recession, the price of oil tends to fall because:
A) people drive more during recessions while looking for employment.
B) the supply of oil increases during a recession, due to technological change.
C) the prices of substitutes for oil rise during recessions.
D) incomes fall during a recession, and oil is a normal good.

Question

Quizplus · Accepted Answer

During a recession, incomes fall and people are likely to cut back on their spending, which reduces the demand for oil, a normal good. This decrease in demand for oil leads to a fall in its price.

When There Is a Recession, the Price of Oil Tends