Which of the following was a beneficial supply shock in the United States in the late 1990s?
A) Higher energy prices.
B) Lower import prices.
C) Stable real prices of computers.
D) None of the above. Supply shocks in the late 1990s were detrimental to the economy.

Question

Quizplus · Accepted Answer

Lower import prices in the late 1990s were a beneficial supply shock for the United States as it led to lower prices for goods and increased consumer purchasing power. This was due to globalization and increased competition from low-wage countries, which led to lower production costs and prices for goods in the US market. A stable real price of computers was also beneficial as it led to increased productivity and efficiency in many sectors, especially in the tech industry. Higher energy prices, on the other hand, would have been a detrimental supply shock as it would have increased production costs and led to higher prices for goods and services in the US market. Therefore, option B is the best choice. Option D is incorrect as there were beneficial supply shocks in the late 1990s, as evidenced by the lower import prices and stable real prices of computers.

Which of the Following Was a Beneficial Supply Shock in the United