If a hurricane were to destroy the major oil refineries on the Gulf Coast, it would likely cause a:
A) short-run supply shock.
B) long-run supply shock.
C) short-run demand shock.
D) long-run demand shock.

Question

Quizplus · Accepted Answer

A hurricane damaging major oil refineries would disrupt the supply of oil in the short term, leading to a short-run supply shock. This is because the physical damage would temporarily reduce the ability to refine oil, but it is expected that the refineries would eventually be repaired or rebuilt, restoring supply.

If a Hurricane Were to Destroy the Major Oil Refineries