A positive demand shock leads to:
A) higher prices and higher employment.
B) higher prices and higher unemployment.
C) higher prices and lower output.
D) lower prices and lower output.

Question

Quizplus · Accepted Answer

A positive demand shock means that there is an increase in demand for goods and services, leading to higher prices due to limited supply. This increase in demand also means that businesses must produce more, which leads to higher employment levels as they strive to meet the increased demand.

A Positive Demand Shock Leads To