Refer to the information provided in Figure 12.3 below to answer the questions that follow. Figure 12.3
-Refer to Figure 12.3.Hurricane Katrina destroyed a large portion of the infrastructure along the Gulf of Mexico coast.This caused
A)the short-run aggregate supply curve to shift from AS1 to AS2.
B)the short-run aggregate supply curve to shift from AS1 to AS0.
C)the economy to move from Point B to Point A along AS1.
D)the economy to move from Point C to Point B along AS1.

Question

Refer to the information provided in Figure 12.3 below to answer the questions that follow.  Figure 12.3
-Refer to Figure 12.3.Hurricane Katrina destroyed a large portion of the infrastructure along the Gulf of Mexico coast.This caused
A)the short-run aggregate supply curve to shift from AS1 to AS2. 
B)the short-run aggregate supply curve to shift from AS1 to AS0. 
C)the economy to move from Point B to Point A along AS1. 
D)the economy to move from Point C to Point B along AS1.

Quizplus · Accepted Answer

Hurricane Katrina destroyed a large portion of the infrastructure along the Gulf of Mexico coast. This caused a decrease in the productive capacity of the economy, which is represented by a shift to the left in the short-run aggregate supply curve from AS1 to AS2.

Refer to the Information Provided in Figure 12