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Social ScienceIf a natural disaster occurs in the US, this is an example of aA) stone cold shockB) negative aggregate demand shockC) negative real shockD) positive real shockE) None of the answers are correct.
If a natural disaster occurs in the US, this is an example of a
A) stone cold shock
B) negative aggregate demand shock
C) negative real shock
D) positive real shock
E) None of the answers are correct.
Expert Answer
A natural disaster is very likely to destroy resources like capital and human resources.
Real shocks are the shocks to the economy that affect real variables like real output, employment, etc. Examples of real shocks are productivity shocks, technology advancement, capital formation, etc.
A natural disaster would destroy country’s human and capital resources. It would mean a negative real shock for the economy since it would directly r...
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