Author Question: In September 2005, destruction to U.S. gasoline refineries was caused by back-to-back storms along ... (Read 57 times)

jlmhmf · **on:** Jun 29, 2018

In September 2005, destruction to U.S. gasoline refineries was caused by back-to-back storms along the U.S. Gulf CoastHurricane Katrina and Hurricane Rita.

In one week, the average price of a gallon of gasoline in the United States increased by about 40 cents. Which of the following best explains why these events pushed up the price of gasoline? A) The demand curve for gasoline shifted to the left along the supply curve for gasoline.
B) The supply curve for gasoline shifted to the left along the demand curve for gasoline.
C) The demand curve for gasoline shifted to the right along the supply curve for gasoline.
D) The supply curve for gasoline shifted to the right along the demand curve for gasoline.

Question 2

According to the classical model, an increase in aggregate demand would

A) lead the economy to recession.
B) lead the economy to a deflationary cycle.
C) cause an adjustment to a higher price level.
D) raise real Gross Domestic Product (GDP) but leave the price level unchanged.