A Drop in Government Spending Would Cause Which Type of Shock

question 34

Multiple Choice

A drop in government spending would cause which type of shock?

• A) Long-run supply shock
• B) Short-run supply shock
• C) Demand shock
• D) Change in price level

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Definitions:

Worker

An individual engaged in a specific activity or labor, especially for economic gain.

Credit Card

A card issued by a financial institution that allows the cardholder to borrow funds with which to pay for goods and services with the promise to repay these funds, plus any agreed charges.

Over-optimism

The tendency to overestimate the likelihood of positive outcomes in the future.

Consumer

An individual or group that purchases goods or services for personal use.