In the Short Run, a Favourable Supply Shock Causes

question 51

Multiple Choice

In the short run, a favourable supply shock causes:

• A)both prices and output to rise.
• B)prices to rise and output to fall.
• C)prices to fall and output to rise.
• D)both prices and output to fall.

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Definitions:

Competition

The rivalry among businesses to attract customers and gain market share, driving innovation, efficiency, and lower prices.

Service Industries

Sectors of the economy that provide intangible goods or services, such as healthcare, education, and finance.

American Firms

Companies or corporations that are registered and operate in the United States, contributing to its economy.

Justice Department

A federal executive department of the U.S. government responsible for the enforcement of the law and administration of justice.