Question

A natural disaster, such as the 2011 japanese earthquake and tsunami, shifts the ___________ curve _____________________. according to economists who believe that the economy is self-regulating, the result will be that the economy _____________be able to find its way back to natural real gdp without government intervention.

Answer 1

A natural disaster shifts SRAS curve LEFTWARD… the economy WILL be able to find its way back to Natural Real GDP without government intervention. The Short-Run Aggregate Supply (SRAS) curve presents a graphical representation of the supply-side of the aggregate market. The SRAS curve can either shift leftward (a decrease in aggregate supply) or rightward (an increase in aggregate supply).