Which of the following would be classified as a negative supply shock?
A) An increase in the price of oil
B) An increase in government purchases
C) An increase in export demand
D) A decline of investor optimism

Question

Quizplus · Accepted Answer

An increase in the price of oil would result in a negative supply shock as it would increase the cost of production for many goods and services, leading to a decrease in supply and potentially higher prices for consumers. Options B, C, and D are not supply shocks, but rather demand shocks or shocks to other factors affecting the economy.

Which of the Following Would Be Classified as a Negative