If a hurricane were to wipe out the majority of the eastern seaboard in the United States:
A) only the long-run aggregate supply curve would shift left.
B) the long-run and short-run aggregate supply curves would both shift left.
C) only the short-run aggregate supply curve would shift left.
D) neither the short-run nor long-run aggregate supply curves would be affected.

Question

Quizplus · Accepted Answer

A hurricane wiping out the majority of the eastern seaboard would cause a significant decrease in the available production capacity and resources, affecting both the short-run and long-run aggregate supply curves. In the short run, the decrease in supply would cause an increase in price levels and a decrease in output. In the long run, the economy would adjust, but not to the same level of production capacity as before the hurricane. This would result in a leftward shift in both the short-run and long-run aggregate supply curves. Therefore, both options A and C are incorrect, and option D is not applicable.

If a Hurricane Were to Wipe Out the Majority of the Eastern