Figure: Solow Growth Curves Reference: Ref 13-2 (Figure: Solow Growth Curves) Which of the following answer choices can explain the shift of the Solow growth curve from A to C in the figure?

Question

Figure: Solow Growth Curves Reference: Ref 13-2  (Figure: Solow Growth Curves) Which of the following answer choices can explain the shift of the Solow growth curve from A to C in the figure?

Quizplus · Accepted Answer

A negative supply shock, such as an increase in oil prices or natural disasters, can cause a decrease in production and a shift of the Solow growth curve to the left from A to C.