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 impact on the economy.
D) cause fewer short-run fluctuations than supply shocks.

Question

Quizplus · Accepted Answer

Demand shocks are unexpected changes in the desires of households and businesses to buy goods and services. They can have a positive or negative impact on the economy, depending on the nature of the shock.

Demand Shocks