If a one-time natural disaster such as an earthquake struck,raising the cost of production,what would the result on the short-run and long-run aggregate supply curves be?
A)It would shift LRAS left, but leave SRAS unchanged.
B)It would leave both the SRAS and LRAS unchanged.
C)It would shift SRAS left, but leave LRAS unchanged.
D)It would shift both the SRAS and the LRAS left.

Question

Quizplus · Accepted Answer

A one-time natural disaster would affect the short-term costs of production, such as increased prices for materials and transportation. This would cause a decrease in short-run aggregate supply (SRAS) as firms face higher costs and are unable to produce as much output. However, the long-run aggregate supply (LRAS) curve would remain unchanged as the factors of production adjust in the long-run. Therefore, the correct answer is C, which states that the SRAS curve shifts left, but the LRAS curve remains unchanged.

If a One-Time Natural Disaster Such as an Earthquake Struck,raising