PRC-3 · Chapter 13 · Question 34 of 50
Assume a prolonged, massive strike by coal miners drastically reduces the supply of coal and spikes its price. Because coal is a core energy source, this supply shock will cause the economy's:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Short-run aggregate supply curve to shift to the left
Explanation
A massive spike in core energy costs creates a negative supply shock, making production expensive across all industries and shifting aggregate supply left.
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