Natural disasters like severe earthquakes are devastating to the economy as well as to the individuals harmed due to
A) supply shocks.
B) demand shocks.
C) demand-pull inflation.
D) demand-pull deflation.

Question

Quizplus · Accepted Answer

Severe earthquakes can cause supply shocks, which refers to a sudden and unexpected disruption in the supply of goods and services. This can lead to a decrease in production and an increase in prices, which can have a negative impact on the economy. Demand shocks, which refer to sudden changes in consumer demand or investment demand, may also occur as a result of the earthquake, but supply shocks are typically more significant in the aftermath of a natural disaster. Demand-pull inflation or deflation are not necessarily associated with natural disasters.

Natural Disasters Like Severe Earthquakes Are Devastating to the Economy