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An unexpected early freeze destroys a large share of a region's agricultural crops. What does this supply shock do to the aggregate supply curve?
AShifts right, since scarcity raises crop prices
BShifts left, since fewer crops are available at any price
CHas no effect, since farming is a tiny share of GDP
DShifts aggregate demand instead of aggregate supply
Answer & Solution
Correct answer: B. Shifts left, since fewer crops are available at any price
1. A crop-destroying freeze is a shock to an input good available for production and sale.
2. With fewer agricultural products available, less can be supplied at any given price level.
3. A curve showing less output supplied at every price level has shifted to the left.
4. This is explicitly identified as a supply-side shock, so option D names the wrong curve.
_Source: OpenStax Principles of Macroeconomics for AP Courses (CC BY 4.0), Ch 10 "The Aggregate Demand/Aggregate Supply Model", section 10.3 | Shifts in Aggregate Supply_
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