Which of the following is an example of a supply shock?
A)A surge in consumer optimism prompts increased buying of goods and services.
B)A surprise tax rebate from the government gives people more money to spend.
C)A dramatic increase in energy prices increases production costs for firms in the economy.
D)Government increases spending on education.

Question

Quizplus · Accepted Answer

A supply shock refers to an unexpected event that suddenly changes the supply of a product or commodity, leading to sudden changes in prices. A dramatic increase in energy prices is a supply shock as it affects production costs and supply.

Which of the Following Is an Example of a Supply