A Severe Drought Hits a Country and Reduces Farm Output

question 110

Multiple Choice

A severe drought hits a country and reduces farm output by 50 percent.This will impact

• A) short-run aggregate supply.
• B) short-run and long-run aggregate supply.
• C) long-run aggregate supply.
• D) aggregate demand.
• E) short-run aggregate supply and aggregate demand.

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Definitions:

Depreciation

The methodical distribution of a physical asset's cost across its lifespan, mirroring its depreciation over time.

Supplies

Items and materials used in the daily operations of a business, often consumable and regularly replaced.

Prepaid Rent

An expense recorded before it is used, representing payment for rent that covers a future period, considered an asset on the balance sheet until the period to which it applies passes.

Salaries and Wages Expense

The total expense for a company from paying salaries and wages to its employees during a financial period, reflecting the cost of labor.