Which of the following events would cause a long-run supply shock?
A) Refinery capacity in the United States drops permanently.
B) A new pest destroys much of the alfalfa crop in a given year.
C) The government spends less on infrastructure maintenance.
D) Housing prices fall.

Question

Quizplus · Accepted Answer

A permanent drop in refinery capacity would cause a long-run supply shock as it would limit the ability of the economy to produce and supply certain goods and services that rely on petroleum products. The other events listed would have more short-term effects on supply.

Which of the Following Events Would Cause a Long-Run Supply