Which of the following causes fluctuations in employment and output?
A)changes in aggregate demand only
B)changes in aggregate supply only
C)changes in aggregate demand and aggregate supply
D)changes in neither aggregate demand nor aggregate supply

Question

Quizplus · Accepted Answer

Changes in aggregate demand and aggregate supply can both cause fluctuations in employment and output. If aggregate demand increases, firms may need to hire more workers to meet the demand, leading to an increase in employment and output. Conversely, if aggregate demand decreases, firms may need to lay off workers, leading to a decrease in employment and output. Similarly, changes in aggregate supply, such as technological advancements or changes in input prices, can also cause fluctuations in employment and output.

Which of the Following Causes Fluctuations in Employment and Output