When a temporary shock in the economy involves a restriction in supply ________.
A)we refer to it as a negative supply shock
B)a rise in commodity prices typically follows
C)a reduction in output typically ensues
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

A temporary shock in the economy that involves a restriction in supply is referred to as a negative supply shock. As a result, commodity prices tend to rise, and a reduction in output typically ensues. Therefore, all of the options mentioned in the question are correct.

When a Temporary Shock in the Economy Involves a Restriction