What is the effect of bad weather for farming or some other temporary decrease in the availability of raw materials?
A)Aggregate supply shifts right.
B)Output falls in the short run.
C)Prices fall in the short run.
D)Long-run aggregate supply shifts to the left.

Question

Quizplus · Accepted Answer

Bad weather or temporary decrease in the availability of raw materials would decrease the output of the agricultural sector or the affected sector, leading to a decrease in aggregate supply in the short run. However, in the long run, the sector might find alternative ways to produce or recover from the setback. Prices may either rise or fall in the short run depending on the elasticity of demand for the product, but this is not a certainty, and there is not enough information to support choice A or C. Long-run aggregate supply would only shift to the left if there were permanent factors that affect the productive capacity of the economy, like population growth, technology, or institutions.

What Is the Effect of Bad Weather for Farming or Some