Supply-shocks can

Question

Supply-shocks can

Quizplus · Accepted Answer

Supply-shocks can be either beneficial or detrimental depending on the circumstances. For example, a positive supply-shock, such as a sudden increase in productivity or a decrease in production costs, can lead to lower prices, increased output, and economic growth. However, a negative supply-shock, such as a natural disaster or a sudden increase in input costs, can lead to higher prices, reduced output, and unemployment. Therefore, supply-shocks can cause both rising prices and higher unemployment, as well as provide benefits to the economy.

Supply-Shocks Can