The term "shock"
A) always refers to an unexpectedly bad event.
B) always refers to an increase in inﬂation.
C) does not tell us whether what has happened is unexpectedly bad or unexpectedly good.
D) always refers to a decrease in real GDP and an increase in unemployment.

Question

Quizplus · Accepted Answer

The term "shock" does not indicate whether what has happened is unexpectedly good or bad, it simply means an unexpected event or change. It can refer to a variety of situations, such as a sudden increase or decrease in oil prices, a natural disaster, or a surprising election result. The other options given (A, B, and D) are incorrect as they make overly specific and limited assumptions about the effects of a shock.

The Term "Shock