A __________ is a case in which aggregate demand turns out to be lower than expected, while a __________ is a case in which aggregate demand turns out to be higher than expected.

Question

A __________ is a case in which aggregate demand turns out to be lower than expected, while a __________ is a case in which aggregate demand turns out to be higher than expected.
	A. negative demand shock; positive demand shock
	B. positive supply shock; negative supply shock
	C. positive demand shock; negative demand shock
	D. excess demand; excess supply

GPT-4o mini · Answer

The correct answer is:

A. negative demand shock; positive demand shock

A negative demand shock occurs when aggregate demand is lower than expected, while a positive demand shock occurs when aggregate demand is higher than expected.