Demand shocks
A) refer to unexpected changes in the desires of households and businesses to buy goods and services.
B) refer to unexpected changes in the ability of ﬁrms to produce and sell goods and services.
C) always have a negative effect on the economy.
D) cause fewer short-run ﬂuctuations than supply shocks.

Question

Quizplus · Accepted Answer

Demand shocks refer to unexpected changes in the desires of households and businesses to buy goods and services. They can have either positive or negative effects on the economy and can cause short-run fluctuations.

Demand Shocks