Which statement best explains why there was a coin shortage during the COVID-19 pandemic?

• A. People began hoarding coins as a form of investment.
• B. The government recalled all coins to disinfect them.
• C. Reduced consumer spending and fewer in-person transactions led to less circulation of coins.
• D. Banks stopped producing coins due to health concerns.

Answer: (C)

Verified step by step guidance

1. Understand the role of coins in the economy: Coins serve as a medium of exchange, facilitating everyday transactions, especially small purchases.
2. Recognize the impact of the COVID-19 pandemic on consumer behavior: Due to health concerns and lockdowns, people reduced in-person shopping and shifted to digital payments.
3. Analyze how reduced in-person transactions affect coin circulation: With fewer physical transactions, coins are not exchanged as frequently, leading to a decrease in their movement through the economy.
4. Connect reduced coin circulation to a coin shortage: When coins are not circulating, they accumulate in households or businesses, causing a shortage in places where coins are needed for transactions.
5. Conclude that the coin shortage was primarily due to reduced consumer spending and fewer in-person transactions, rather than hoarding, government recall, or production stoppages.