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VladimirAG [237]
4 years ago
10

Ethanol and sugar are both made from sugarcane, and ethanol can be used as a fuel substitute for oil. Increasing oil prices caus

e the demand for ethanol to increase. This will cause the ______ sugar to ______ and its price to ______.
Business
1 answer:
Nina [5.8K]4 years ago
6 0

Answer:

The answer is: the <u>supply of</u> sugar to <u>decrease</u> and its price to <u>increase</u>.

Explanation:

Factories that process sugarcane have to decide what quantities will they produce of sugar and ethanol. If they produce sugar, they can'y produce ethanol, and vice versa.  

So when the price of ethanol increases, sugarcane factories will increase the quantity supplied of ethanol, therefore reducing the quantity supplied of sugar. Since the quantity supplied of sugar decrease by external factors not related to its demand, then the price of sugar will increase since the quantity demanded will be more than the quantity supplied.

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Answer:

<h3>Required:</h3>

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Explanation:

Is there an option tho?

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DECIDE

Explanation:

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The aggregate demand and aggregate supply model is a useful simplification of the macroeconomy used to explain short-run fluctua
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Answer:

QUESTION 1:

The horizontal axis measures an economy's real GDP- 3

QUESTION 2:

As price level rises, imports become relatively cheaper than domestically produced goods- 1

Explanation:

QUESTION 1

The horizontal axis of the aggregate demand and aggregate supply measures an economy's real GDP. The GDP is the sum of all the final goods and services produced in the economy while the vertical axis of an aggregate supply and aggregate demand diagram measures the price index level.

QUESTION 2

When domestic interest rate is low compared to foreign interest rates, domestic investors invest in foreign countries where return on investments is higher. Increased outflow of currency to foreign countries, causes a decrease in real exchange rate. This decrease, increases net exports. This then, increases aggregate demand. As the price level drops, interest rates fall, investment in foreign countries becomes increased, real exchange rate falls, net exports increases and the aggregate demand then increases.

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3 years ago
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