Question

A supply shock is

A. an increase in potential GDP caused by a government expenditure​ multiplier, resulting in a leftward shift of the AD curve.
B. an increase in both the inflation and the unemployment rates that may sometimes result in a rightward shift of the SRAS curve.
C. a sudden increase in the price of an important natural​ resource, resulting in a leftward shift of the SRAS curve.
D. an increase in the rate of inflation as a result of expansionary fiscal​ policy, resulting in a leftward shift of the SRAS curve.

Answer 1

C. a sudden increase in the price of an important natural​ resource, resulting in a leftward shift of the SRAS curve.

Step-by-step explanation: