All of the following are examples of demand shocks,except one.Which is the exception?
A) A spontaneous decrease in money demand
B) A tax increase
C) A contraction of the money supply by the Fed
D) An increase in the price level
E) A reduction in government spending.

Question

Quizplus · Accepted Answer

An increase in the price level is an example of a supply shock, as it directly affects the cost of production and shifts the aggregate supply curve. The other options all directly impact aggregate demand and are therefore examples of demand shocks.

All of the Following Are Examples of Demand Shocks,except One