Suppose the U.S. was to experience a series of terrorists' attacks aimed at the electricity grid. This would likely
A)increase aggregate demand.
B)increase aggregate supply.
C)decrease aggregate demand.
D)decrease aggregate supply.

Question

Quizplus · Accepted Answer

Terrorist attacks on the electricity grid would disrupt the production process, and hence the overall supply of goods and services would decrease. Therefore, it will lead to a decrease in aggregate supply.