A severe drought hits a country and reduces farm output by 50%.In the short run,this will ________ output and ________ employment.
A) decrease; decrease
B) decrease; increase
C) decrease; have no effect on
D) have no effect on; have no effect on
E) increase; increase

Question

Quizplus · Accepted Answer

A severe drought that reduces farm output by 50% will lead to a decrease in output as the supply of agricultural products is reduced. This decrease in output will also lead to a decrease in employment as a reduced supply of agricultural products will lead to a reduction in the demand for labor in the agricultural sector. Therefore, choice A is the best answer.

A Severe Drought Hits a Country and Reduces Farm Output