Question

When demand shocks lead to recessions, it is mainly due to unexpected changes in the:________.

a. supply of goods and services.
b. price inflexibility.
c. the inability of government policy to affect demand.
d. government regulations that prevent firms from adjusting output in response to the shocks.

Answer 1

c the inability of government policy to affect demand

Answer 2

When demand shocks lead to recessions, it is mainly due to unexpected changes in the:

the inability of government policy to affect demand.

Step-by-step explanation:

Government has every right to make policies that would strictly affect price, if this is not done and there is inflation of price it would lead to recession.