Question

Read the following news article by Tim Johnson:

The nature of global trade is about to change. The Panama Canal will soon have a third lane that can accommodate mega-ships nearly three times larger than any vessel that has ever transited the isthmus over the past century. It might not seem like earth-shaking news. But the impact will ripple around the world, from shipyards in South Korea to highways in Texas to coalfields in Colombia and soy plantations in Brazil’s northeast. Entire nations will see trade patterns shift.
The expanding of the Panama Canal will have what economic impact on world trade and its consumers?

a) prices will rise

b) prices will drop

c) have fewer goods.

d) demand will increase

Answer 1

b) prices will drop

Step-by-step explanation:

Because more goods will be able to be loaded on the bigger ships more goods will be sent to markets around the world at a faster pace. When more goods are available demand goes down, when demand goes down prices for the consumer fall.

Answer 2

The expanding of the Panama Canal will increase the demand on world trade and its consumers.

Answer: Option D

Step-by-step explanation:

On March 10th, 2015 Tim Johnson wrote an article on Panama Canal. It was about Nicaragua starting a project extending Panama Canal twice the capacity. Panama Canal administrator Quijano that this expansion would give way for 98% of the world’s fleet of ship.

The Panama Canal started operating in the year 1914 and all the largest ships were able to fit into the lock and they were named as Panamax vessels. The largest ship was of the length of aircraft carriers and can hold up to 14,000 containers. This led to the increase in trade.