Which of the following would not be considered a supply shock?
A) A change in the price of imported oil
B) Frost damage to the orange crop
C) A change in the level of education of the average worker
D) An increase in the level of government spending

Question

Quizplus · Accepted Answer

An increase in the level of government spending would not be considered a supply shock as it does not affect the supply curve. Supply shocks are events that shift the supply curve, such as changes in input costs (like the price of imported oil) or unexpected disruptions in production (like frost damage to a crop). The education level of the average worker may affect productivity and therefore the supply curve, so it could be considered a supply shock.

Which of the Following Would Not Be Considered a Supply