Suppose Global Pollution Causes Climatic Changes That Permanently Harm Crop

question 149

Multiple Choice

Suppose global pollution causes climatic changes that permanently harm crop production worldwide.What would aggregate supply and demand analysis lead an economist to expect?  

• A) increases in the price level 
• B) decreases in the price level 
• C) an outward shift of the aggregate demand curve and an outward shift of the supply curve 
• D) a leftward shift of the aggregate demand curve along a vertical aggregate supply curve

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Definitions:

Price Level

The economy's wide-ranging average of prices for every produced good and service.

Price Level

An index of the average price of goods and services in an economy over a period, indicating inflation or deflation.

Exchange-Rate Effect

The impact of changes in the relative value of currencies on the economy, affecting import and export prices, investment flows, and overall economic performance.

Aggregate Demand

The full volume of demand for goods and services in an economy, priced at a particular level, within a designated period.