Which of the Following Is the Best Example of a Supply

question 11

Multiple Choice

Which of the following is the best example of a supply shock?

• A) an increase in the availability of capital and machinery due to normal changes in business investment
• B) a decrease in the productivity of the labor force due to a decline in the average educational level of workers
• C) a decline in agricultural output due to a summer drought
• D) an increase in output as a result of an expansion in employment

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Definitions:

Treasury Bill

Short-term government securities issued at a discount from the face value and maturing at par, used to finance government spending.

Par

Par refers to the face value of a bond or stock, which is the amount originally paid for it and the amount that will be repaid at maturity.

Geometric Average Return

The compounded annual rate of return over time, accounting for the compounding of investment returns.

Arithmetic Average Return

A method of calculating the average return of an investment by simply dividing the sum of all returns by the number of periods.