HomeworkLib
Question


Question 23 1 pts If a major drought across the country dramatically reduced the production of corn and wheat, which of the f
business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

The price level needed to support production would increase and aggregate supply curve would shift to left.

( Weather is an important determinant of supply. Let SS be the short run aggregate supply curve and DD be the aggregate demand curve. P is the equilibrium price and Q is the equilibrium quantity established by the intersection of SS and DD. Now, as a result of drought, production of wheat and corn is dramatically reduced. As a result, there is a fall in supplied. A fall in quantity supplied is shown by a shift in aggregate supply curve from SS to S1S1 because the Change is caused by drought which is determinant of supply other than price ,otherwise it would have been a movement along the short run aggregate supply curve SS.

Intersection of new supply curve SS with DD leads to an increase in equilibrium price from P to P1.

This, its proved that fall in supply caused by drought increases the price level needed to support production and the short run aggregate supply curve shifts to left.)

0 0
Add a comment
Know the answer?
Add Answer to:
Question 23 1 pts If a major drought across the country dramatically reduced the production of...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Question 1 An increase in the price level will ________ the real value of wealth and,...

    Question 1 An increase in the price level will ________ the real value of wealth and, as a result, there will be ________ the aggregate demand curve. have no effect on; no change in increase; a rightward shift of reduce; an upward movement along reduce; a leftward shift of increase; an upward movement along 2. A severe drought hits a country and reduces farm output by 50 percent. This will impact aggregate demand. short-run aggregate supply and aggregate demand. short-run...

  • 1. An above-full-employment equilibrium occurs when Group of answer choices aggregate demand decreases while neither the...

    1. An above-full-employment equilibrium occurs when Group of answer choices aggregate demand decreases while neither the short-run nor long-run aggregate supply changes. short-run aggregate supply decreases while neither aggregate demand nor long-run aggregate supply changes. the equilibrium level of real GDP is greater than potential GDP. the equilibrium level of real GDP is less than potential GDP. 2. Which of the following shifts the aggregate demand curve rightward? Group of answer choices a decrease in consumption an increase in investment...

  • Please help with both questions The short-run aggregate supply curve is horizontal when Othere are unemployed...

    Please help with both questions The short-run aggregate supply curve is horizontal when Othere are unemployed resources and prices do not increase when aggregate demand increases. there are no unemployed resources and prices do not increase when aggregate demand or supply increases. prices are inflexible and the economy is at full employment. Othere are unemployed resources and prices do not decrease when aggregate supply increases. 0.5 points Save Answer QUESTION 6 A reduction in nominal wages will cause which of...

  • If the money wage rate and other resource prices do not change when the price level...

    If the money wage rate and other resource prices do not change when the price level rises by 10 percent, Select one: a. the short-run aggregate supply curve shifts leftward b. the long-run aggregate supply curve shifts rightward c. the long-run aggregate supply curve shifts leftward d. there is movement along the short-run aggregate supply curve Next page G 2019 Hamdan Bin Mohammed Smart University. All rights reserved

  • Answer these 4 will rate after Graphically, a negative supply shock, such as the increase in...

    Answer these 4 will rate after Graphically, a negative supply shock, such as the increase in oil prices in 1973, can be shown as: O a leftward shift of the AD curve. a downward and to the right shift of the SR-AS curve. an upward and to the left shift of SR-AS curve. O a rightward shift of the AD curve. Decreases in short-run aggregate supply due to a reduction in the nation's resources result in O an increase in...

  • Suppose the Indian Ocean tsunami destroyed coffee production in Indonesia. On international coffee markets, this would...

    Suppose the Indian Ocean tsunami destroyed coffee production in Indonesia. On international coffee markets, this would cause a a movement up and to the right along the supply curve for coffee. b a movement down and to the left along the supply curve for coffee. c a leftward shift of the coffee demand curve. d a leftward shift of the coffee supply curve. e a rightward shift of the coffee supply curve. If firms expect lower prices in the future,...

  • Which of the following statements best describes how economic growth is represented i n the AD/AS...

    Which of the following statements best describes how economic growth is represented i n the AD/AS diagram? In the AD/AS diagram, long-run economic growth due to productivity increases over time will be represented by a gradual shift to the right of aggregate supply. In the AD/AS diagram, short-run economic growth due to productivity increases over time will be represented by a dramatic shift to the right of aggregate supply. In the AD/AS diagram, short-run economic growth due to productivity increases...

  • 1) The efficient market hypothesis states that: markets currently contain an efficient amount of information for...

    1) The efficient market hypothesis states that: markets currently contain an efficient amount of information for them to clear. in order for markets to be efficient they need to be adequately regulated. when buyers and sellers act in their own best interest markets will be efficient. markets currently contain all available information and correctly value instruments. 2) An increase in the expected future price of inputs will cause: the long-run aggregate supply curve to shift to the left. the short-run...

  • 6. Demonstrate the decrease in wealth using the closed AD-AS model, ceteris paribus, in both the...

    6. Demonstrate the decrease in wealth using the closed AD-AS model, ceteris paribus, in both the short-run and long-run. Assumptions: (1) start in long-run equilibrium; (2) prices are sticky; (3) nominal wages are fixed in the short-run. [Note: this is the self-correcting version.] [Sub-questions 6-10 are connected.] In the short-run, _______ shifts _______. A. the aggregate demand curve; leftward B. the aggregate demand curve; rightward C. the short-run aggregate supply curve; leftward D. the short-run aggregate supply curve; rightward E....

  • QUICK CHECK multiple choice 1. When the economy goes into a recession, real GDP —and unemployment a. rises, rises b...

    QUICK CHECK multiple choice 1. When the economy goes into a recession, real GDP —and unemployment a. rises, rises b. rises, falls c. falls, rises d. falls, falls 2. Which of the following is shifted by a sudden crash in the stock market? a. the aggregate-demand curve b. the short-run aggregate-supply curve, but not the long-run aggregate-supply curve c. the long-run aggregate-supply curve, but not the short-run aggregate-supply curve d. both the short-run and the long-run aggregate- supply curves PART...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT