Suppose global pollution causes climatic changes that permanently harm crop production worldwide.What would aggregate supply and demand analysis lead an economist to expect?
A) increases in the price level
B) decreases in the price level
C) an outward shift of the aggregate demand curve and an outward shift of the supply curve
D) a leftward shift of the aggregate demand curve along a vertical aggregate supply curve

Question

Suppose global pollution causes climatic changes that permanently harm crop production worldwide.What would aggregate supply and demand analysis lead an economist to expect?  
A) increases in the price level 
B) decreases in the price level 
C) an outward shift of the aggregate demand curve and an outward shift of the supply curve 
D) a leftward shift of the aggregate demand curve along a vertical aggregate supply curve

Quizplus · Accepted Answer

A decrease in crop production would likely lead to higher prices for agricultural products and potentially for food in general, contributing to an increase in the overall price level. This is because the aggregate supply curve would shift to the left, indicating a decrease in the overall supply of goods and services in the economy, leading to higher prices.

Suppose Global Pollution Causes Climatic Changes That Permanently Harm Crop