Relatively recently, Toyota took over the position of the world's largest automobile manufacturer from General Motors (GM). This is an example of ________ in the United States.
A) a positive aggregate demand shock
B) a negative aggregate demand shock
C) a rightward movement along the IS curve
D) a positive aggregate supply shock
E) Not enough information is given.

Question

Quizplus · Accepted Answer

A negative aggregate demand shock occurs when there is a decrease in the overall demand for goods and services in an economy. In this case, GM's loss of its position as the world's largest automobile manufacturer to Toyota suggests a decrease in the demand for GM's automobiles, which constitutes a negative aggregate demand shock.

Relatively Recently, Toyota Took Over the Position of the World's