A temporary supply shock,such as a drought,would
A)increase the marginal product of capital and increase desired investment.
B)decrease the marginal product of capital and decrease desired investment.
C)have little or no effect on desired investment.
D)decrease both the marginal product of capital and the marginal product of labour in the long-term future.

Question

Quizplus · Accepted Answer

A temporary supply shock like a drought typically affects current production and supply but does not significantly alter the long-term productivity of capital, thus having little effect on desired investment.

A Temporary Supply Shock,such as a Drought,would