Why do business cycle fluctuations typically arise?

Multiple choice question.

Actual supply ends up being lower or higher than expected.

The movement in stock prices is less than expected.

The production process takes longer than expected.

Actual demand ends up being lower or higher than expected.

1 answer

Business cycle fluctuations typically arise from various factors, but the most relevant option from your list is:

Actual supply ends up being lower or higher than expected.

This choice reflects how unexpected changes in supply can lead to fluctuations in economic activity, impacting production, employment, and overall economic performance. However, it's important to note that actual demand can also significantly influence business cycle fluctuations.