Briefly explain with a graph whether given statement is true or false. “An adverse supply shock...
Homework Answers
When suddenly supply side decreases mostly due to natural event but in temporarily phase then phenomenon is known as adverse supply shock.
It is short time period.
If the supply is decreases and demand is more then due to shortage of supply the price of the product will be Increases.
so
in the graph when supply goes from SRAS1 to SRAS2 then the price is
also increases from P1 to P2.
Hence statement is true.
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