If there is 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)None of the above is correct.

Question

Quizplus · Accepted Answer

If there is bad weather for farming or some other temporary decrease in the availability of raw materials, it will lead to a decrease in the aggregate supply in the economy. As a result, output falls in the short run. This may also cause prices to rise due to the decreased availability of goods in the market. However, prices may not necessarily fall in the short run. Therefore, option A is incorrect. Option D is incorrect since there is a clear impact on short-run output.

If There Is Bad Weather for Farming or Some Other