Hurricane Katrina destroyed oil and natural gas refining capacity in the Gulf of Mexico. This subsequently drove up natural gas, gasoline, and heating oil prices. As a result, this should
A) move the economy down along a stationary short-run aggregate supply curve.
B) shift the short-run aggregate supply curve to the right.
C) move the economy up along a stationary short-run aggregate supply curve.
D) shift the short-run aggregate supply curve to the left.
D
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Sometimes banks tend to invest in risky stocks because the deposits of their customers are insured by the Federal Deposit Insurance Committee. This behavior is an example of ________
A) adverse selection B) moral hazard C) the paradox of thrift D) the free-rider problem
China's economy did not decline at all during its transition from communism to capitalism
Indicate whether the statement is true or false
The evidence from banking crises in other countries indicates that
A) deposit insurance is to blame in each country. B) a government safety net for depositors need not increase moral hazard. C) regulatory forbearance never leads to problems. D) deregulation combined with poor regulatory supervision raises moral hazard incentives.
Which of the following goods will have the most elastic demand at any time?
a. coffee b. gasoline c. restaurant meals d. insulin