An example of an aggregate supply shock is
A)inflation caused by a surge in demand.
B)the cutoff of oil by the OPEC nations in the early 1970s.
C)the increase in the labor force due to the baby-boomer generation reaching working age.
D)the increase in candy sales every February.

Question

Quizplus · Accepted Answer

The cutoff of oil by the OPEC nations in the early 1970s caused a sudden decrease in the supply of oil, which led to an increase in the prices of oil-based products and a decrease in overall economic output. This is an example of an aggregate supply shock.

An Example of an Aggregate Supply Shock Is