Question

After OPEC nations started pegging the price of petroleum to the value of gold rather than to the depreciating U.S. dollar, ______.

a. the United States began a boycott of Middle Eastern oil

b. it raised costs for American consumers

c. the United States began investing heavily in alternative energy

d. it lowered costs for American consumers

Answer 1

b. it raised costs for American consumers

After Nixon abandoned the gold standard in 1971, OPEC nations started pegging the price of petroleum to the value of gold rather than to the depreciating U.S. dollar. This shift effectivelv raised costs for American consumers. Around the same time, U.S. oil demand rose sharply, more than doubling between 1965 and 1973, and domestic production (now diminished by environmental reforms that limited coal as an alternative energy resource) failed to keep pace, leaving the nation dependent on foreign imports and vulnerable to OPEC. By the fall of 1973, the price of oil was climbing steeply.