Which of the following is an example of an adverse supply shock?
A)a decrease in the money supply
B)a tax cut
C)a worldwide drought
D)decreased government spending

Question

Quizplus · Accepted Answer

A worldwide drought would decrease agricultural production, leading to a decrease in the supply of food products. This is an example of an adverse supply shock, where the economy experiences a sudden decrease in the availability of goods and services. The other choices listed are not examples of adverse supply shocks as they do not directly impact the availability of goods and services.

Which of the Following Is an Example of an Adverse