Asked by Bailey Hembree on Jul 21, 2024
Verified
Uncertainty over the possibility of war in Iraq in March 2003 caused many corporations to purchase oil in advance in the futures market to protect against unexpected price increases.What effect did their actions have on the market for oil?
A) Demand will increase
B) Demand will decrease
C) Supply will increase
D) Supply will decrease
Futures Market
A financial market where participants can buy and sell contracts for the delivery of assets at a future date, often used for hedging and speculation.
Demand
The quantity of a product or service that consumers are willing and able to purchase at various prices.
- Ascertain the reasons for modifications in demand and supply.
- Understand how global happenings and choices made by groups such as OPEC affect the supply in the market.
Verified Answer
CC
Chelcie CarewJul 24, 2024
Final Answer :
A
Explanation :
The purchase of oil in advance in the futures market by corporations to protect against unexpected price increases would increase the demand for oil in the market. Therefore, the correct answer is A.
Learning Objectives
- Ascertain the reasons for modifications in demand and supply.
- Understand how global happenings and choices made by groups such as OPEC affect the supply in the market.