An increase in which of the following would lead to decrease in equilibrium output and an increase in equilibrium prices?
A) positive demand shock
B) negative demand shock
C) positive supply shock
D) negative supply shock

Question

Quizplus · Accepted Answer

A negative supply shock decreases the supply of goods and services in an economy, leading to higher prices and lower output as the supply curve shifts leftward.

An Increase in Which of the Following Would Lead to Decrease