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Wars, new inventions, harvest failures, and changes in government policy are examples of A) the business...

Wars, new inventions, harvest failures, and changes in government policy are examples of

A) the business cycle.

B) economic models.

C) shocks.

D) opportunity costs.

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Answer #1

During the time of war, new inventions, harvest failures, and changes in government policy, we can expect the production to decrease to a great extent but the demand remains the same. When the demand is the same but productivity declines, there will be a shortage and at the same time, the prices will be higher. These are examples of economic shock. Economic shocks are unpredictable and this affects the economy a lot and either a positive or negative changes can be expected.

Answer:C. shocks

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