The Katrina disaster in New Orleans decreased the ability of oil companies to purify crude oil into gasoline. This caused the:
A. supply curve for gasoline to shift inward.
B. supply curve for gasoline to shift outward.
C. quantity of gasoline supplied to move in along the supply curve.
D. quantity of gasoline demanded to move out along the demand curve.
Answer: A. supply curve for gasoline to shift inward.
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At higher income levels the interest rate must be lower to achieve money market equilibrium
Indicate whether the statement is true or false
Most economists believe that a zero rate of unemployment
A) is obtainable with the correct monetary policy. B) would result in a better functioning economy. C) is inconsistent with a well-functioning economy. D) is obtainable only if the inflation rate is also zero.
Assume that the size of the underground economy increases both absolutely and relatively over time. As a result:
a) real GDP will rise more rapidly than nominal GDP. b) GDP will tend to increasingly understate the level of output through time. c) GDP will tend to increasingly overstate the level of output through time. d) the accuracy of GDP will be unaffected through time.
If the quantity supplied in a market exceeds the quantity demanded in a market, we would expect price to:
A) stay the same. B) increase. C) decrease. D) rise in order to clear the market.