The In the news article titled "Gas Prices Jump in Matthew's Wake" suggests gasoline prices increased a s a result of damage caused by Hurricane Matthew. When the availability of gasoline decreases as a result of this damage the supply curve shifts to the left, causing
A. Consumers pay lower prices as they decide to drive less.
B. The price of gasoline to move up along the market supply curve
C. The price of gasoline to move up along the market demand curve.
D. A surplus to exist at the original equilibrium price.
Answer: C
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Application of the time inconsistency problem to monetary policy suggests that, without some mechanism to ensure commitment, the
A) rate of inflation will be higher than it would be with commitment. B) level of real output will be lower than it would be with commitment. C) rate of inflation will be higher and the level of real output will be lower than they would be with commitment. D) rate of inflation and the level of real output will be higher than they would be with commitment.
Fiscal policy takes _____ to implement than monetary policy because ______.
a. a longer time; the FOMC meets much more often than Congress b. a longer time; Congress must debate and agree on the action c. a shorter time; Congress meets much more often than the FOMC d. a shorter time; the FOMC cannot act without congressional approval
Suppose the bank has a 10% reserve requirement, $5000 in deposits, and has loaned out all it can, given the reserve requirement
A. It has $500 in reserves and $4500 in loans B. It has $50 in reserves and $4950 in loans C. It has $555 in reserves and $4445 in loans
Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B