Which of the following is the most appropriate explanation of a price shock?
A)A large shift in the AD curve
B)A large shift in the aggregate expenditure line
C)A shift in potential GDP
D)A large change in a key commodity price
E)A shift in the monetary policy rule line

Question

Quizplus · Accepted Answer

A price shock refers specifically to a large and sudden change in the price of a key commodity, such as oil or wheat, which can have ripple effects throughout the entire economy. This is different from a shift in the AD curve, aggregate expenditure line, potential GDP, or monetary policy rule line, which may also affect prices, but are not necessarily considered price shocks.

Which of the Following Is the Most Appropriate Explanation of a Price