Question

Please select the type of shock that would produce the indicated shift.

Answer 1

The various types of shocks that will be caused are:

• A leftward shift in the AD curve - Negative demand shock.
• A leftward shift in the SRAS curve - Negative supply shock.
• A rightward shift in the SRAS curve -  Positive supply shock.
• A positive shift that leads to a higher aggregate price level.  - Positive demand shock.
• A rightward shift in the AD curve - Positive demand shock.
• A negative shift that leads to a lower aggregate price level - Negative demand shock.
• Stagflation -  Negative supply shock.
• A negative shift that leads to a higher aggregate price level - Negative supply shock.
• A positive shift that leads to a lower aggregate price level - Positive supply shock.

What causes shocks in the economy?

When there is a change in the components of demand or supply, there will be a shift in the Aggregate Demand and Supply Curves to show that either demand or supply has changed as a result.

For instance, if there is a weaker harvest for a crop, there will be a leftward shift in the SRAS curve which would lead to a negative supply shock.

In conclusion, supply and demand are prone to shocks.

Find out more on Stagflation at brainly.com/question/23113698.