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

A. lower price level
B. lower unemployment rates
C. increase in RDGP
D. higher employment rates

1 answer

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

A negative demand shock decreases overall demand in the economy, which can lead to lower prices as businesses adjust to sell their goods and services. This often results in lower output and can temporarily increase unemployment.