In which situation 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 leftward shift in the long-run aggregate supply curve occurs when there is a decrease in the economy's productive capacity due to factors that are not easily fixable in the short run, such as natural disasters like hurricanes. Options A, C, and D would cause an increase in the economy's productive capacity and therefore shift the long-run aggregate supply curve to the right.

In Which Situation Would the Long-Run Aggregate-Supply Curve Shift Left