Which of the following is an example of a demand shock?
A) Hurricane Harry knocks out oil drilling platforms in the Gulf of Mexico.
B) Consumers become worried about job loss and buy fewer goods and services than expected.
C) Floods in the Midwest destroy crops.
D) The federal government unexpectedly requires automobile producers to raise fuel eﬃciency standards.

Question

Quizplus · Accepted Answer

A demand shock refers to a sudden event that increases or decreases demand for goods or services in the economy. Option B, where consumers become worried about job loss and buy fewer goods and services than expected, directly affects the demand side of the economy by reducing it. This is a classic example of a demand shock.

Which of the Following Is an Example of a Demand