An effect of short-run fluctuations due to a positive demand shock is __________.

A. higher price level
B. higher unemployment rates
C. decrease in output
D. lower employment rates

1 answer

An effect of short-run fluctuations due to a positive demand shock is A. higher price level.

In the short run, a positive demand shock increases overall demand in the economy, which leads to higher output and typically results in a higher price level due to increased demand for goods and services.