Which of the following is an example of a real shock?
A)an announcement by the Bank of Canada that it is changing its policy on the interest rate
B)a new technology making electricity generation by renewable energies much cheaper
C)stock markets falling because of a decline in oil prices
D)the Bank of Canada increasing the money supply by buying bonds

Question

Quizplus · Accepted Answer

A real shock refers to a sudden and unexpected change in economic conditions. Option B, new technology making electricity generation by renewable energies much cheaper, fits the definition of a real shock as it represents a significant change in the cost structure of the energy sector. Options A, C, and D are not real shocks as they involve changes that are either anticipated or the result of deliberate policy actions.

Which of the Following Is an Example of a Real