The short-run fluctuations in output and unemployment that we see in the real world are the result of:
A)shocks and events that are going according to the plans.
B)shocks and events that are not going according to the plans.
C)the actual demand to be exactly what the firms were expecting.
D)the actual supply to be exactly what the firms were planning.

Question

Quizplus · Accepted Answer

Short-run fluctuations in output and unemployment are caused by unexpected shocks and events that disrupt the plans made by firms and individuals. The economy is constantly subject to various exogenous factors such as changes in consumer preferences, technological innovations, natural disasters, wars, and financial crises that can lead to unpredictable shifts in demand and supply. As a result, firms may produce more or less than they had planned, leading to fluctuations in output and employment levels.

The Short-Run Fluctuations in Output and Unemployment That We See