A decrease in output and an increase in prices would indicate that the economy has experienced a:
A) positive supply side shock.
B) negative supply side shock.
C) positive demand side shock.
D) negative demand side shock.

Question

Quizplus · Accepted Answer

A decrease in output and an increase in prices are typical effects of a negative supply side shock. This could be caused by factors such as natural disasters, increases in production costs, or decreases in productivity or innovation.

A Decrease in Output and an Increase in Prices Would