Figure 9.4 -Refer to Figure 9.4. The flooding in the Midwest during the summer of 1993 destroyed a large portion of the agricultural crop in the United States. This caused: A) the economy to move from Point B to Point A along AS₁. B) the aggregate supply curve to shift from AS₁to AS₂. C) the economy to move from Point C to Point B along AS₁. D) the aggregate supply curve to shift from AS₁to AS₀.

Question

Quizplus · Accepted Answer

The destruction of a large portion of the agricultural crop would shift the aggregate supply curve to the left, from AS₁ to AS₂, as there would be less output available at any given price level. This is illustrated by the shift from Point B to Point A on the graph. Therefore, choice B is the correct answer.

Figure 9.4 -Refer to Figure 9.4. the Flooding in the Midwest During