Business cycle fluctuations typically arise because:
A) The actual supply of goods and services ends up being more or less than what consumers were expecting
B) The actual demand for goods and services ends up being more or less than the expected supply of goods and services
C) The actual demand for goods and services ends up being more or less than what firms were expecting
D) Prices tend to be flexible in the short run

Question

Quizplus · Accepted Answer

Business cycle fluctuations typically arise because the actual demand for goods and services ends up being more or less than what firms were expecting. This can result in either a shortage (if the demand is higher than expected) or a surplus (if the demand is lower than expected) of goods and services. These fluctuations can lead to changes in production, employment, and economic growth over time.

Business Cycle Fluctuations Typically Arise Because