Which one of the following is not a U.S. supply shock?
A) unions force an increase in national wage rates.
B) the oil supply from the Middle East drops 30%.
C) extended droughts reduce U.S. food production 25%.
D) chinese purchases of U.S. exports increase.

Question

Quizplus · Accepted Answer

Chinese purchases of U.S. exports increasing is not a U.S. supply shock, it would be a boost to the U.S. economy. The other options - unions forcing an increase in national wage rates, the oil supply from the Middle East dropping 30%, and extended droughts reducing U.S. food production 25% - are all examples of supply shocks that can negatively impact the U.S. economy.

Which One of the Following Is Not a U