What are supply shocks?
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5. (Changes in Aggregate Supply) What are supply shocks? Distinguish between beneficial and adverse supply shocks. Do such shocks affect the short-run supply curve, the long-run supply curve, or both? What is the resulting impact on potential GDP?
Explain what effect adverse and favorable supply shocks have on the supply curve.
Give an example of a supply shock that has affected the U.S. economy on more than one occasion.