What impact would a year of unusually bad weather for agriculture have on the SRAS and LRAS curves?
A)It would increase SRAS but not LRAS.
B)It would decrease SRAS but not LRAS.
C)It would increase SRAS and LRAS.
D)It would decrease SRAS and LRAS.

Question

Quizplus · Accepted Answer

A year of unusually bad weather for agriculture would lead to a decrease in the supply of agricultural products. This would shift the SRAS curve to the left, as the cost of production for firms has increased due to decreased supply. However, the LRAS curve would remain unchanged as the weather conditions are not a permanent factor affecting the economy.

What Impact Would a Year of Unusually Bad Weather for Agriculture