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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If the costs of production increase, there is
A) a decrease in aggregate supply and the AS curve shifts rightward. B) a decrease in the quantity of real GDP supplied and a movement down along the AS curve. C) a decrease in aggregate supply and the AS curve shifts leftward. D) an increase in the quantity of real GDP supplied and a movement up along the AS curve. E) an increase in aggregate supply and the AS curve shifts rightward.
Briefly describe how imports and taxes affect the size of the expenditure multiplier
What will be an ideal response?