Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
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Question
Chapter 4R, Problem 14MCQ
To determine
To determine an example of a positive
Expert Solution & Answer
Explanation of Solution
A large increase in defense spending will boost the demand as the government is spending a lot to prevent the slowdown. Hence, it is a positive demand shock in the economy.
The stock market crash of 1929 is a negative demand shock and not a positive demand shock.
The new discovery of the oil field is a positive supply shock and not a demand shock.
Reduction in aggregate price level is not a demand shock.
An increase in nominal wages is not a demand shock.
Hence, option ‘a’ is the correct option.
Economics Concept Introduction
A demand shock is a sudden unexpected event that dramatically increases or decreases demand for a product or service. A positive demand shock is a sudden increase in demand which will boost the economy and prevent a slowdown.
Chapter 4R Solutions
Krugman's Economics For The Ap® Course
Ch. 4R - Prob. 1MCQCh. 4R - Prob. 2MCQCh. 4R - Prob. 3MCQCh. 4R - Prob. 4MCQCh. 4R - Prob. 5MCQCh. 4R - Prob. 6MCQCh. 4R - Prob. 7MCQCh. 4R - Prob. 8MCQCh. 4R - Prob. 9MCQCh. 4R - Prob. 10MCQ
Ch. 4R - Prob. 11MCQCh. 4R - Prob. 12MCQCh. 4R - Prob. 13MCQCh. 4R - Prob. 14MCQCh. 4R - Prob. 15MCQCh. 4R - Prob. 16MCQCh. 4R - Prob. 17MCQCh. 4R - Prob. 18MCQCh. 4R - Prob. 19MCQCh. 4R - Prob. 20MCQCh. 4R - Prob. 21MCQCh. 4R - Prob. 22MCQCh. 4R - Prob. 23MCQCh. 4R - Prob. 24MCQCh. 4R - Prob. 25MCQCh. 4R - Prob. 1FRQCh. 4R - Prob. 2FRQCh. 4R - Prob. 3FRQCh. 4R - Prob. 1CTQCh. 4R - Prob. 2CTQCh. 4R - Prob. 3CTQCh. 4R - Prob. 5CTQ
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