In which of the following situations would the long-run aggregate supply curve shift left?
A)if the capital stock increases
B)if there is a hurricane
C)if the government removes some environmental regulations that limit production methods
D)if trade barriers are removed

Question

Quizplus · Accepted Answer

A hurricane would damage infrastructure and reduce the economy's ability to produce goods and services, causing a leftward shift in the long-run aggregate supply curve. Increasing the capital stock (Option A) would shift the curve to the right. Removing environmental regulations (Option C) would increase the economy's output and shift the curve to the right. Removing trade barriers (Option D) would increase the economy's access to foreign markets, increasing output and shifting the curve to the right.

In Which of the Following Situations Would the Long-Run Aggregate