Question

In the 2000s, Venezuelan President Hugo Chàvez instituted economic policies that caused smuggling and hoarding of food. What did Chàvez do to create this behavior, and which zone (represented by a letter) on the graph represents the result?

Answer 1

Chavez set a price ceiling on food. This is represented by the letter C - A price ceiling is a control or limit imposed by a government over how high a price can be charged for a product. By doing this, Hugo Chavez made a huge blunder, since it resulted in the quantity of food demanded exceeding the quantity supplied. This in turn resulted in people smuggling and hoarding food.

Answer 2

Venezuelan President Hugo Chavez introduced socialism into the Venezuelan economic policies and completely closed their country to the any capital gains. Their country has gone from being a profitable terrorist spot to a danger zone. American's have been warned not to visit due to the economic downfall. As for a graph, I have no graph to reference to as to which zone is has been greatly effected. On a personal note, I have a friend who lives in Venezuela and it breaks my heart because the recent elections were a scam. Many workers that still obtained income were bullied into voting for the socialist leader or risked losing their only source of income. People are starving and dying because of the dictator.