Which of the following is NOT an example of a supply shock?
A) a drought in the Midwest
B) a decline in natural gas prices following discovery of new fields
C) the introduction of a new line of computer-controlled machine tools in manufacturing
D) a substantial increase in federal government spending on Medicare

Question

Quizplus · Accepted Answer

Option D is not an example of a supply shock because it is related to an increase in government spending and not a change in the availability of goods or services in the market. Supply shocks typically result from changes in the production or distribution of goods or services, such as natural disasters, changes in technology, or fluctuations in availability of resources.

Which of the Following Is NOT an Example of a Supply