Which of the following is considered a negative supply shock?
A)increasing immigration in the economy causes the labor supply to rise
B)an improvement in technology
C)an increase in unemployment
D)an unexpected decrease in the refining capacity for oil

Question

Quizplus · Accepted Answer

A negative supply shock is an unexpected event that decreases the availability of goods or services or increases their costs. An unexpected decrease in refining capacity for oil would cause a decrease in the supply of oil, which could lead to higher prices and reduced output in industries that rely on oil. This would be a negative supply shock. The other options do not fit the definition of a negative supply shock.

Which of the Following Is Considered a Negative Supply Shock