Which one of the following would constitute a positive supply shock?
A) The supply of money in the economy increases.
B) Discretionary government spending increases.
C) The price of oil decreases as a result of conflict or war.
D) The federal income tax decreases.

Question

Quizplus · Accepted Answer

A positive supply shock, such as a decrease in the price of oil, can lower production costs for many industries, thereby increasing the overall supply of goods and services in the economy.

Which One of the Following Would Constitute a Positive Supply