Which of the following is NOT an example of a supply shock?
A) a drought in the Midwest
B) a decline in natural gas prices following discovery of new fields
C) the introduction of a new line of computer-controlled machine tools in manufacturing
D) a substantial increase in federal government spending on medicare

Question

Quizplus · Accepted Answer

A supply shock refers to an unexpected event that affects the availability of goods or services in the market, leading to a shift in supply. Federal government spending on medicare may have an impact on demand for healthcare services, but it does not affect the supply of goods or services, making it an inappropriate example of a supply shock.

Which of the Following Is NOT an Example of a Supply