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Sagot :
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 https://brainly.com/question/23113698.
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