If there is an oil-supply disruption resulting in higher international oil prices, domestic oil prices in open-market countries such as the United States will rise as well, whether such countries import all or none of their oil.
If the statement in the passage concerning oil-supply disruptions is true, which of the following policies in an open-market nation is most likely to reduce the long-term economic impact on that nation of sharp and unexpected increases in international oil prices?
A) Maintaining the quantity of oil imported at constant yearly levels
B) Increasing the number of oil tankers in its fleet
C) Suspending diplomatic relations with major oil-producing nations
D) Decreasing oil consumption through conservation
E) Decreasing domestic production of oil
D
D
D) Decreasing oil consumption through conservation
D.. i read both A & D twice before selecting
D) Decreasing oil consumption through conservation
If the statement about oil-supply disruption is true, domestic oil prices in an open-market country will rise when an oil-supply disruption causes increased international oil prices. A reduction in the amount of oil an open-market country consumes could reduce the economic impact of these increases. D gives a way to reduce oil consumption and is thus the best answer. A and E describe policies that could actually increase the long-term impact of increases in international oil prices, so neither of these choices is appropriate. No relationship is established between the economic impact and either the number of oil tankers or diplomatic relations in B and C, so neither of these choices is appropriate.
correct answer D
my pick – c reduce usage of oil
Dear srini,
can you justify your answer ?
D
D
How about B ? Increasing the number of oil tankers in its fleet. This way it can buy a large amount of oil and store it to keep the price low when the actual price increses in the market.
B cannot be right as increasing the number of oil tankers will only help in the short-run……….the questions specifically wants to seek out the solution that is most likely to reduce the LONG-TERM economic impact of rising oil prices.
D is correct
D
D
I will go for D.
D
Isn’t this supposed to be difficult, or at least standardized?! Paw!!!
‘D’, obviously.
I question the scope of this question…
D is an obvious answer,
but it takes ALOT of assumptions and ‘common’ knowledge to get to it. For instance, we ASSUME reducing consumption will reduce the price in the local market…however, this is NOT necessrily true from an economics standpoint. Just because demand in one region goes down does not necessarily follow that price will fall because demand could rise in other regions or for other reasons outside of ‘conservation’.
It’s a stretch to get to D, but it’s only obvious because the other answers are pretty ridiculous and require an even FURTHER stretch.
D
D
my ans is “d”
d
D without doubt
The answer is D
D
D
D
d
D
D
I think its A. It is clearly mentioned in the paragraph that, oil prices in open-market countries will rise, whether such countries import all or none of their oil. Which can be looked at in a way to assume that even when the oil consumption is in control and the country has no reason to import or minimize its import, still the oil price will rise in response to international price disturbance. This reduces the argument in favor of D being the answer. Ans A provides for a way to skip the international turbulence in oil prices through maintaining an yearly import stock and seems most probable.
D
D:
option D