Asked by Jasmine Collymore on Jul 03, 2024

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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

Supply Shock

An unexpected event that suddenly changes the supply of a product or commodity, resulting in an unexpected change in price.

Imported Oil

Oil that is produced outside of one's home country and brought in through international trade agreements for consumption or use.

Government Spending

Expenditures by government agencies on goods and services that influence the economy.

  • Understand the fundamentals of supply and demand shocks within the field of economics.
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Hannah DockeryJul 05, 2024
Final Answer :
D
Explanation :
An increase in government spending is a demand shock, not a supply shock. Supply shocks are unexpected events that affect the production and availability of goods and services, such as changes in the price of inputs like oil or natural disasters that damage crops. A change in the level of education of the average worker could potentially lead to a supply shock if it affects productivity and output.