A supply shock is A. an increase in both the inflation and the unemployment rates that may sometimes result in a rightward shift of the SRAS curve. B. an increase in the rate of inflation as a result of expansionary fiscal policy.resulting in a leftward 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 potential GDP caused by a government expenditure multiplier, resulting in a leftward shift of the AD curve.

Question

A supply shock is A. an increase in both the inflation and the unemployment rates that may sometimes result in a rightward shift of the SRAS curve. B. an increase in the rate of inflation as a result of expansionary fiscal policy.resulting in a leftward 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 potential GDP caused by a government expenditure multiplier, resulting in a leftward shift of the AD curve.

Answer 1

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

Answer 2

## Step1: Definition of Supply Shock### Understand that a supply shock refers to a sudden event that drastically changes the supply of a particular product or commodity.## Step2: Analyze Options### Review each option to determine if it aligns with the definition and implications of a supply shock.

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