A natural disaster,such as the 2011 Japanese earthquake and tsunami,shifts the economy's ___________ curve _____________________.According to economists who believe that the economy is self-regulating,the result will be that the economy _____________be able to find its way back to Natural Real GDP without government intervention.
A) SRAS; rightward; will
B) SRAS; leftward; will not
C) AD; leftward; will not
D) SRAS; leftward; will
E) AD; leftward; will

Question

Quizplus · Accepted Answer

A natural disaster like the 2011 Japanese earthquake and tsunami typically damages production capacity, reducing the overall supply of goods and services in the economy. This is represented by a leftward shift in the Short-Run Aggregate Supply (SRAS) curve. Economists who believe in the self-regulating nature of the economy argue that it will adjust on its own to return to its Natural Real GDP level without the need for government intervention.

A Natural Disaster,such as the 2011 Japanese Earthquake and Tsunami,shifts