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Supply Shock
A supply shock, also known as a supply-side shock, is an unforeseen or external event that alters the supply of goods and services. In a macroeconomic context, this can be caused by events like changes in oil prices or technological advancements. In microeconomics, it is represented by an exogenous shift of the supply curve for a particular product.
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Learn After
An unexpected and widespread technological breakthrough significantly reduces the cost for businesses to produce all types of goods and services. Assuming no other simultaneous changes in the economy, what is the most likely immediate effect on the general price level and the total quantity of output?
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Which of the following events represents a negative supply shock in an economy?
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