OpenSAT

Question #N474

The primary reason for the current increase in the price of many goods is the growing demand for them, but the recent price hikes have also been caused by disruptions in the supply chain, particularly in manufacturing. For example, an increase in the price of gasoline has led to higher prices for a wide range of goods, since gasoline is a key input in many sectors, including transportation and manufacturing. There is a lack of consensus about whether these factors are temporary or permanent, but many economists have expressed concern about the long-term effects of price increases on consumers and businesses. Some economists have suggested that price increases, if they persist, could lead to a decrease in consumer spending and a slowdown in economic growth.

Which of the following statements accurately reflects the author’s point of view about the effects of price increases?

A. Price increases are likely to have a negative impact on the economy.

B. Price increases are a natural part of a healthy economy.

C. Price increases are likely to lead to a decrease in the price of other goods.

D. Price increases are always temporary and should not be a cause for concern.

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Correct Answer is: A

The author expresses concern about the long-term effects of price increases on consumers and businesses. The author also states that some economists believe that price increases, if they persist, could lead to a decrease in consumer spending and a slowdown in economic growth. These statements suggest that the author believes that price increases are likely to have a negative impact on the economy.