Innovations such as the microchip and the Internet lead to business cycle variations because
A) they cause prices to be sticky.
B) signiﬁcant innovations occur irregularly and unexpectedly.
C) the central bank will often change the money supply in response.
D) they cause prices to be ﬂexible.

Question

Quizplus · Accepted Answer

Significant innovations like microchips and the Internet occur irregularly and unexpectedly, disrupting the economy's equilibrium and leading to business cycle variations. This can result in fluctuations in employment, investment, output, and prices. However, the other options provided are not accurate explanations for how these innovations lead to business cycle variations.

Innovations Such as the Microchip and the Internet Lead to Business