Shocks to the economy occur when

Question

Multiple Choice
stock prices rise by more than 10 percent per year.
government takes a more active role in the economy.
prices are flexible.
actual economic events do not match what people expected.

Answer 1

The correct answer is: actual economic events do not match what people expected.

Shocks to the economy typically refer to unexpected events that can cause significant fluctuations in economic activity, often leading to changes in spending, investment, and overall economic conditions. When actual events differ from expectations, it can create instability and uncertainty in the economy.