Suppose There Is a Temporary Supply Shock Because of a War

question 40

Multiple Choice

Suppose there is a temporary supply shock because of a war in the Middle East,then ________.

• A)this would constitute a cost push shock due to a restriction in the supply of oil
• B)the AS curve would shift to the left
• C)this could theoretically lead to stagflation
• D)all of the above
• E)none of the above

---

Definitions:

Reservation Price

The highest price a person is prepared to spend on a product or service.

English Auction

A bidding process where the price ascends and the highest bid wins, commonly used in auction houses and online marketplaces.

Willingness To Pay

The maximum amount an individual is prepared to spend on a good or service, reflecting the perceived value.

Revenue

The total amount of money generated from the sale of goods or services before any expenses are subtracted.