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4. Which of the following is not a situation involving external shock?

2 Answers

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Answer:

The answer is the first option :)

Step-by-step explanation:

consumers reduce spending because they fear that their nation is going to war.

User Kevin Boone
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4 votes

Answer:

consumers reduce spending as they fear the nation will go into war

Step-by-step explanation:

shocks are unpredictable in nature, external shocks are outside our control. sudden discoveries, disaster , death of trading partner etc are some of the examples. They usually affect the imports - exports of nations.

If consumers perceive war coming possibly due to utterances/actions of political leaders. The reduced spending ( spending pattern) is expected as people prefer to have cash with them during war due to scarcity or need to run to safe places.

User Emanuel Hanner
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