Summarised revision notes on the topic of supply-side and demand-side shocks, including graphs. Perfect to look back on when revising and when practising exam questions and essays.
Demand-side shocks
Demand-side shocks are Supply-s
A demand-side shock will effect
unexpected and significant and signi
the level of national income,
changes in the level of aggregate of fac
unemployment, and inflation. availabili
demand.
What are economic shocks?
Examples:
Sudden, unexpected events that
An unexpectedly large affect the macroeconomy,
change in the especially the growth rate.
exchange rate or in
interest rates.
A banking crisis, which
effects both business
and consumer
ECONOMIC SHOC
confidence.
Supply
more ne
Demand-side shocks can there is
directly affect planned spending higher u
in the economy. For example, a sharp
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