Suppose That a Small Economy That Depends Mostly on Agriculture

question 2

Multiple Choice

Suppose that a small economy that depends mostly on agriculture experiences a year with exceptionally good conditions for growing crops. What would the good weather do to the short-run aggregate-supply curve and the short-run Phillips curve?

• A) It would shift both the short-run aggregate-supply curve and the short-run Phillips curve right.
• B) It would shift both the short-run aggregate-supply curve and the short-run Phillips curve left.
• C) It would shift the short-run aggregate-supply curve to the right, and the short-run Phillips curve to the left.
• D) It would shift the short-run aggregate-supply curve to the left, and the short-run Phillips curve to the right.

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