Economics Dr.

Katie Sauer

How Fear Turned a Surplus Into Scarcity NPRs Planet Money 11/04/2011 http://www.npr.org/blogs/money/2011/11/04/142016962/the-friday-podcast-how-fear-turned-a-surplusinto-scarcity After listening to the podcast, answer the following questions. 1. What are two key pieces of background information regarding world rice?

2. How/why do governments intervene in the rice market?

3. What did India do that inadvertently set off the Great Rice Fiasco?

4. Explain the chain reaction that was started by Indias action.

5. Explain how public incompetence and private greed made the situation worse.

6. Since the rice shortage was not caused by an actual reduction in the global supply of rice, what was the key to stopping the panic? 7. Explain how the panic was finally stopped.

8. What lesson do economists hope is learned from this?

9. What lesson was actually learned by many governments?

10. How could this type of crisis realistically be avoided?