The prices of certain goods, such as ice and gasoline, often increase after a natural disaster such as a hurricane. The economic explanation for this observation is that
A) people panic in disaster situations.
B) disasters bring out the worst in people.
C) the disaster temporarily reduces the supply of the goods and increases the demand for the goods.
D) the disaster temporarily reduces the supply of the goods and reduces the demand for the goods.
C
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We cannot predict the effect on the equilibrium quantity, but know that the market clearing price will increase when
A) supply decreases and at the same time demand increases. B) supply increases and demand increases simultaneously. C) supply and demand decreases simultaneously. D) supply and demand increases simultaneously.
German luxury car exports were hurt in 2009 as a result of the recession. How did this decrease in exports affect Germany's aggregate demand curve?
A) The aggregate demand curve shifted to the right. B) The aggregate demand curve did not shift, but there was a movement up the aggregate demand curve. C) The aggregate demand curve did not shift, but there was a movement down the aggregate demand curve. D) The aggregate demand shifted to the left.