Suppose there is news that indicates that gasoline supplies might suddenly become disrupted by a truckers' union strike
What would you expect would happen to the demand for gasoline in the present? How might consumers change their behavior and why? What impact would this news have on the price of gasoline immediately? Would it matter whether the news story was accurate?
The expectations of a gasoline supply disruption might get consumers to keep their tanks full at all times. This "tank topping" behavior would artificially increase the demand for gasoline and would cause a price hike very shortly. It would not matter whether the news story was accurate but rather whether people thought it was credible.
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Which of the following assets is the most liquid?
a. Money market mutual fund shares. b. Certificates of deposit. c. Dollars. d. Passbook savings deposits.
The CPI includes the prices of
a. goods and services purchased by American consumers b. goods and services purchased by all consumers (both foreign and domestic) c. goods and services purchased by the government d. investment goods purchased by businesses e. exports purchased by foreign buyers