Final answer:
Demand and supply shocks that can cause business cycles include technological advancements, changes in consumer preferences, and natural disasters, but not stable economic conditions. 'Ceteris paribus' is used to study the effects of these shifts on the demand and supply curves for goods and services.
Step-by-step explanation:
The sources of demand and supply shocks that can cause business cycles include technological advancements, changes in consumer preferences, and natural disasters. Technological advancements can lead to shifts in both demand and supply, as new technology can increase productivity or create new products, altering production and consumer consumption patterns. Changes in consumer preferences can dramatically shift demand for certain goods or services, with corresponding impacts on the economy. Natural disasters can disrupt supply chains, reduce production capabilities, and thereby shift the supply curve. However, stable economic conditions do not typically result in demand or supply shocks but are associated with steady states in the business cycle.
The study of these phenomena often assumes ceteris paribus, where all other variables are held constant to observe the effects of these specific shifts. Shifts in the demand curve for goods and services can occur due to changes in tastes, population, income, and prices of related goods, while supply curve shifts may be due to changes in input prices, natural conditions, changes in technology, and government actions.