An aggregate demand shock is a:
A) slow and expected shift in spending.
B) slow and unexpected shift in spending.
C) rapid and expected shift in spending.
D) rapid and unexpected shift in spending.

Question

Quizplus · Accepted Answer

An aggregate demand shock is a sudden and unexpected shift in spending behavior, such as a sharp reduction in consumer or business spending or a decrease in government expenditure. This results in a sudden decrease in aggregate demand and can lead to a recession or economic downturn.

An Aggregate Demand Shock Is A