In 2005, Hurricane Katrina destroyed oil and natural gas refining capacity in the Gulf of Mexico which subsequently drove up natural gas, gasoline, and heating oil prices. Three years later, once the refining capacity was restored, these prices came back
down. The restoration of refining capacity should
A) shift the short-run aggregate supply curve to the left.
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) move the economy down along a stationary short-run aggregate supply curve.
Answer: B
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A freely floating exchange rate exists when
a. governments set pegs for the exchange rate but occasionally adjust them. b. offshore banks determine the exchange rate. c. supply and demand forces are allowed to determine the rate at which currencies are exchanged for each other. d. governments use international reserves only to influence exchange rates.
The graph that represents the amount of deadweight loss (measured on the vertical axis) as a function of the size of the tax (measured on the horizontal axis) looks like
a. a U. b. an upside-down U. c. a horizontal straight line. d. an upward-sloping curve.
Crowding in is the result of
A. Rising unemployment. B. Rising government borrowing. C. Falling interest rates. D. Declining business confidence.
Money coming into a business is called ________. Examples include tickets, broadcast contracts, concessions, and sponsorships.
a. profit b. expenses c. revenue d. income e. debt