An unusual series of rainstorms wash out the grain crop in the Prairies,severely curtailing the availability of corn,wheat,and soybeans.What effect would this have on aggregate supply?
A)It would shift the SRAS right, but not the LRAS.
B)It would shift both the SRAS and the LRAS right.
C)It would shift the SRAS left, but not the LRAS.
D)It would shift both the SRAS and the LRAS left.

Question

Quizplus · Accepted Answer

The decrease in supply of corn, wheat, and soybeans due to the crop damage would shift the short-run aggregate supply (SRAS) curve to the left as producers would have higher costs and lower output due to the loss of their crop. However, it won't shift the long-run aggregate supply (LRAS) curve since this is determined by factors such as technology, capital, and labor availability, which are unlikely to be affected by temporary crop damage. Therefore, the correct answer is C, which states that the SRAS curve would shift left but not the LRAS.

An Unusual Series of Rainstorms Wash Out the Grain Crop