An aggregate demand shock is generally referred to as
A)an unexpected event that causes the aggregate demand curve to shift inward or outward.
B)an expected event that causes the aggregate demand curve to shift inward or outward.
C)an unexpected event that causes the long-run aggregate supply curve to shift inward or outward.
D)an unexpected event that causes the short-run aggregate supply curve to shift inward or outward.

Question

Quizplus · Accepted Answer

An aggregate demand shock refers to an unexpected event that causes the aggregate demand curve to shift inward or outward, leading to a change in the overall level of economic activity (output, employment, and prices). This shock could come from factors such as changes in consumer or business confidence, fiscal or monetary policy changes, external events such as wars or natural disasters, etc. The key feature is that it is unexpected, which means that it cannot be easily anticipated or incorporated into economic forecasts.

An Aggregate Demand Shock Is Generally Referred to as