An economy in which output has decreased and prices have increased would suggest that there has been a:
A) positive supply side shock.
B) negative supply side shock.
C) positive demand side shock.
D) negative demand side shock.

Question

Quizplus · Accepted Answer

A negative supply side shock occurs when there is a decrease in the supply of goods and services, which leads to an increase in prices and a decrease in output.

An Economy in Which Output Has Decreased and Prices Have