How would factors and events in the world likely affect the Texas economy?

Decreased world oil prices would likely cause a slowdown in economic activity because Texas has a large economy that is heavily dependent on the oil and gas industry. When global oil prices drop, it affects the profitability of oil production, leading to reduced investment and job losses in the sector. With many Texans employed in oil-related jobs, a slowdown in this industry can have a ripple effect, impacting many other sectors of the Texas economy, from services to retail. Additionally, state revenues are often tied to oil production and sales taxes, so decreased prices can lead to budget cuts and reduced public spending, further slowing economic activity.

The other options do not accurately reflect the direct economic causations and relationships. A decrease in world population does not necessarily correlate with a boost in Texas exports, as demand varies based on many factors besides population. Higher agricultural prices generally benefit agriculture, but may not directly correlate with a decrease in Texas manufacturing, as both sectors can function independently. Lastly, increased tourism benefits a variety of sectors including hospitality, transportation, and retail, rather than focusing predominantly on oil. Therefore, option A correctly highlights the interconnectedness of Texas’ economy with global oil prices.