Which of these is considered a supply shock?
A) an increase in consumer spending
B) a decrease in investment
C) an increase in input costs
D) a decrease in imports

Question

Quizplus · Accepted Answer

A supply shock refers to an unexpected event that changes the cost of production or the availability of goods and services. Option C, an increase in input costs, fits this definition as it would affect the production costs and supply of goods and services. The other options, such as an increase in consumer spending or a decrease in investment, would affect demand but not necessarily supply. A decrease in imports would affect trade and the balance of payments but may not necessarily affect domestic supply.

Which of These Is Considered a Supply Shock