State and local property taxes are regressive

Which of the following is not a situation involving external shock?

(A) Consumers reduce spending on expensive goods because the country has gone to war. (B) Consumers use more gasoline because of lower prices due to the discovery of large deposits of oil. (C) Consumers pay high prices for corn because of a severe drought. (D) Consumers reduce spending because they fear that their nation is going to war.

The rationing function of prices means that

A) government is responsible for setting the prices of basic foods. B) all goods and services are produced by large firms. C) businesses determine what goods consumers should purchase. D) buyers and sellers synchronize their decisions through the price system.