A demand shock
A) is any event that causes the aggregate demand curve to shift
B) is usually caused by a change in the price level
C) is usually caused by a change in real GDP
D) can be traced back to a shift in the economy's production possibilities frontier
E) is generally a good thing for the economy

Question

Quizplus · Accepted Answer

A demand shock is any event that causes the aggregate demand curve to shift. This can be caused by factors such as changes in consumer confidence, government spending, or shifts in international trade. It is not necessarily related to a change in the price level or real GDP, and whether it is good or bad for the economy depends on the specific circumstances surrounding the shock.

A Demand Shock