Final answer:
Changes in the business cycle create 'D. Economic uncertainties' due to shifts in the economy's internal structure and the temporary nature of fiscal policy responses.
Step-by-step explanation:
Changes in the business cycle often lead to different types of uncertainties within an economy. One of the primary outcomes of changes in the business cycle is economic uncertainties. This is because as the economy goes through different phases like recession, recovery, and growth, the internal structure of the economy evolves, which can take time and may not return to its previous state. For example, the Great Recession resulted in significant changes in sectors like construction and finance, with many jobs not returning to those sectors. Additionally, business cycles can lead to changes in fiscal policy that may have temporary effects, influencing levels of aggregate demand and aggregate supply, contributing to economic instability.
Economic stability is crucial, as harmful swings that discourage spending can stall growth and improvement, affecting the circular flow of the economy. Therefore, the answer to the student's question is that changes in the business cycle create 'D. Economic uncertainties' as they can disrupt the equilibrium of the circular flow. It is during these times that the government may implement fiscal policy to try and stabilize the economy.