Economic shocks are random, unpredictable events that have a widespread impact on the
economy that are caused by things outside the scope of economic models. Economic shocks can be classified by the economic sector that they originate from or by whether they primarily influence either supply or demand. Supply-side shocks affect short run aggregate supply and can also affect a country's long-run productive potential. Examples of such shocks might include: Steep rise in oil and gas prices or other commodities. Political turmoil / strikes. Natural disasters causing sharp fall in production.Demand shock. In economics, a demand shock is a sudden event that increases or decreases demand for goods or services temporarily. ... When demand for goods or services increases, its price (or price levels) increases because of a shift in the demand curve to the right.
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